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LPX Group Launches Listed Debt Direct Lending Index

LPX Group AG has launched its inaugural Listed Debt “DLX” Direct Lending Index.

The index is based on a representative universe of listed debt companies. LPX Group says that as of July 29, 2022, a total of 41 companies can be identified worldwide. and because the performance benchmark is a stock index based on market prices, this also allows for a direct comparison with other indices or benchmarks.

Since 2010, the DLX Direct Lending Index shows an annualized geometric mean return of 10.46% with a standard deviation of 21.41%. The MSCI Financials returns over the same period was 6.31% with a standard deviation of 19.07%.

“Since the global financial crises, private debt has become its own asset class for investors, driven by attractive post global credit opportunities and as a lucrative alternative to the low yields observed within traditional fixed income and credit markets. Investors’ access to this market was nigh on impossible previously as it is a notoriously challenging one to track - a niche market without any standard definitions. This DLX Direct Lending Index overcomes this for investors, broadening investor access on a systematic basis that allows them to benefit from this burgeoning asset class. Empirical results suggest that the integration of private debt into the strategic asset allocation improves the risk and return menu for an investor in stocks and bonds. Listed private debt promises to be a particularly attractive asset class for investors who wish to focus on a steady dividend payment in their asset allocation," said LPX AG Co-Founder and Managing Director Dr Michel Degosciu.

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