Thursday, October 21, 2010

PEU Index at 104

Bloomberg reported:

Private-equity firms invested a record $40.1 billion of cash in the third quarter.

The private-equity council said it’s creating an index to measure the industry based on equity investment, fundraising, transaction volume and the dollar value of private-equity exits such as initial public offerings.

The index rose to 104.3 in the third quarter from 100.8 in the second quarter, according to today’s report. Its low point was 60.4 in the first quarter in 2009.

When the index stands at 100, the four components are at their 10-year moving average. The index is calculated using data from Thomson Reuters, Pitchbook, Preqin and the council.

Notice the PEU Council waited for the index to be above 100, before releasing the data.  Some might consider 104.3 a high fever.  From a health care perspective, PEU's are clearly an infection.