Deeper Data Analysis: Confirms Reliability & Breadth
In summer 2024, an Assistant Professor of Finance at Penn State University’s Smeal College of Business evaluated the coverage and representativeness of the Lincoln Database of the U.S. private debt market. The logic of the test was to compare information within the Lincoln Database to other United States private company databases that were independent of Lincoln. This approach is analogous to a pharmaceutical effectiveness test whereby a drug is tested on independent populations; if the results are confirmatory the FDA considers the test’s data as evidence of efficacy.
The statistical test, results and conclusions for the Lincoln Database are as follows:
For the test, the Assistant Professor of Finance at Penn State University’s Smeal College of Business compared the:
- Portfolio companies relying on private debt valued by Lincoln to information in: (a) PitchBook and (b) BDC Collateral.
- Consistency of information between the Lincoln Database to PitchBook and BDC Collateral in instances in which they disclosed the terms of a private debt transaction.
- Number of Lincoln data-providing clients to the top 25 largest private credit lenders in the United States tracked by Preqin.
The results were robust and were as follows:
Among the 3,766 U.S. firms in Pitchbook that have a private debt deal with terms reported, 2,002 (53%) appear in the Lincoln Database.
Among the 4,729 U.S. PE-backed firms in BDC Collateral that borrowed from BDCs with terms reported, 2,272 (48%) appear in the Lincoln Database.
For the approximate 50% of those firms in PitchBook and BDC Collateral appearing in the Lincoln Database, their average values of disclosed debt terms (spread, debt amount, and maturity) as well as non-accrual rates agreed with those of the remaining firms not appearing in the Lincoln Database. This indicates the representativeness of the Lincoln Database on the U.S. private debt market.
30% of firms appearing in the Lincoln Database do not report a private debt deal in PitchBook, indicating that the Lincoln Database has substantial coverage beyond the companies tracked by PitchBook.
19 of the top 25 U.S. investors in total private debt (direct lending) fund AUM, as identified by Preqin, are Lincoln data-providing clients.
In conclusion, it was found that the Lincoln Database: (a) is reliable and consistent as compared to other United States private debt databases; and, (b) includes data not found in those other databases.
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Review the results of an independent study on the quality and breadth of Lincoln’s private market database led by an Assistant Professor of Finance at Penn State University’s Smeal College of Business.
Important Disclosure
The Lincoln Private Market Index is an informational indicator only, and does not constitute investment advice or an offer to sell or a solicitation to buy any security. It is not possible to directly invest in the Lincoln Private Market Index. Some of the statements above contain opinions based upon certain assumptions regarding the data used to create the Lincoln Private Market Index, and these opinions and assumptions may prove incorrect. Actual results could vary materially from those implied or expressed in such statements for any reason. The Lincoln Private Market Index has been created on the basis of information provided by third-party sources that are believed to be reliable, but Lincoln International has not conducted an independent verification of such information. Lincoln International makes no warranty or representation as to the accuracy or completeness of such third-party information.
The LPMI should not be construed as an offer to sell or buy, or a solicitation to sell or buy, any products linked to the performance of the LPMI. The use of the LPMI in any manner, including for benchmarking purposes, is not endorsed or recommended by Lincoln International and Lincoln International is not responsible for any use made of the LPMI. Lincoln International does not guarantee the accuracy and/or completeness of the LPMI and Lincoln International shall not have any liability for any errors or omissions therein. None of Lincoln International, any of its affiliates or subsidiaries, nor any of its directors, officers, employees, representatives, delegates or agents shall have any responsibility to any person (whether as a result of negligence or otherwise) for any determination made or anything done (or omitted to be determined or done) in respect of the LPMI and any use to which any person may put the LPMI. Lincoln International has no obligation to update the LPMI and has no obligation to investors with respect to any product based on the performance of the LPMI. Any investment in such a product will not acquire an interest in the LPMI. Lincoln International is not an investment adviser and will not provide any financial advice relating to a product linked to the performance of the LPMI. Investors should read any such product offering documentation and consult with their own legal, financial and tax advisors before investing in any such product.
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