First Fund to Offer Access to Morningstar Indexes’ New AI-driven Private Equity Replication Index—No Lock-Ups, No Performance Fees, and Monthly Liquidity

Chicago, IL—February 18, 2025—Third Wire Asset Management, a team of industry veterans dedicated to improving access to alternative investments responsibly, today announced it has launched the Third Wire / Morningstar PitchBook US Buyout Replication Index Fund (“USBRIF” or the “Fund”). The Fund is the first to offer investors direct exposure to the newly launched Morningstar PitchBook Buyout Replication Index (the “Index”), which was developed to systematically capture the key characteristics of buyout investing by tracking publicly traded small- and mid-cap stocks that resemble companies in private equity buyout funds.

USBRIF provides access to a strategy designed to provide a buyout-like risk/return profile with the transparency of public markets—offering daily pricing, monthly liquidity, no performance fees, and no J-Curve or capital calls.

“Private equity investing is long overdue for innovation,” said Daniel Harms, CEO of Third Wire Asset Management. “When I first saw PitchBook’s analyst note on buyout replication, I saw an opportunity for investors. For too long, private equity has lacked a true benchmark, leaving a significant gap in the market. PitchBook’s research not only addressed this gap but also reinforced something else I’ve long believed—there had to be a better, cleaner, and cheaper way to access private equity-like returns.”

A New Benchmark for Private Equity Investing

The industry has long struggled to find a reliable benchmark for private equity. Traditional public indexes fail to reflect private equity’s sector tilts, leverage, and security selection biases. Meanwhile, private equity firms report valuations infrequently, artificially smoothing volatility and obscuring real risk.

The Morningstar PitchBook Buyout Replication Index was built to help address these issues, offering a systematic, data-driven approach to modeling buyout’s risk/return profile using public equities.

“The Buyout Replication Index aims to replicate returns from private equity buyout funds with the transparency and liquidity of the public markets,” said Sanjay Arya, Head of Innovation, Index Products at Morningstar Indexes. “We are excited to partner with Third Wire as they use the index to deliver an innovative alternative to traditional private equity offerings to their clients.”

Taking the Private Out of Private Equity

The Morningstar PitchBook Buyout Replication Index is designed to systematically replicate the risk/return profile of private equity buyouts using publicly listed equities.

• AI-Driven Security Selection – The Index uses a neural network trained on decades of take-private transactions, quarterly financial statements, and daily stock prices to identify public companies with buyout-like characteristics.
• Sector & Leverage Adjustments – Private equity firms favor specific industries and apply leverage to enhance returns. The Index reflects these allocations and leverage dynamics.
• Daily Pricing & Transparency – Private equity funds use valuation models that mask short-term volatility. The Index tracks market pricing in real time, offering a daily view of risk.
• Equity Volatility is a Feature, Not a Bug – Traditional private equity fund volatility is smoothed, not reduced. The Index reflects the real economic risks of equities without artificial smoothing from periodic valuations.

“Private equity firms customarily attribute their performance to operational alpha, but our research found that for many private equity funds, leverage, valuation shifts, and sector selection are actually the primary performance drivers,” said Andrew Akers, CFA, Lead Quantitative Research Analyst, PitchBook. “The Morningstar PitchBook Buyout Replication Index was created to capture these factors systematically and provide a much-needed and realistic benchmark for the private equity industry.” 

PitchBook focuses on helping investors navigate the opaque nature of private markets through indexes, categorizations, scoring frameworks, and risk models. As the private markets continue to grow in prominence and accessibility, they continue building a suite of tools to help their clients understand GP strategies and performance analytics.

Why USBRIF is a Potential Game Changer

• Liquidity and Flexibility – Unlike most traditional private equity funds, USBRIF offers monthly liquidity with no lock-ups, allowing investors to manage exposure with more nuance.
• Cost-Effective with No Performance Fees – A 1.5% flat management fee with no performance fees (no 2% management + 20% carry) ensures more returns stay in investor portfolios.
• Transparency and Daily Pricing – USBRIF provides daily price transparency via the Index, offering visibility into risk and return.
• Accessible Fund Structure – Offered under SEC Rule 506(c), USBRIF is available exclusively to funds, institutions, and verified accredited investors.

About Third Wire Asset Management

Third Wire Asset Management is a team of industry veterans who’ve spent their careers working to improve access to alternative investments. The firm challenges the status quo with a simple idea: investment managers should serve investors, not the other way around. Third Wire focuses on stripping away the excessive fees, restrictive lock-ups, and opaque structures that have long defined the alternative investment industry, replacing them with clear pricing, liquidity, and transparency. By aligning our interests with investors, Third Wire is—The Alternative You’ve Been Looking For.

For more information, visit www.thirdwireassetmanagement.com.

Important Disclosures

The Morningstar Indexes are the exclusive property of Morningstar, Inc. Morningstar, Inc., its affiliates and subsidiaries, its direct and indirect information providers, and any other third party involved in, or related to, compiling, computing, or creating any Morningstar Index (collectively, “Morningstar Parties”) do not guarantee the accuracy, completeness, and/or timeliness of the Morningstar Indexes or any data included therein and shall have no liability for any errors, omissions, or interruptions therein. None of the Morningstar Parties make any representation or warranty, express or implied, as to the results to be obtained from the use of the Morningstar Indexes or any data included therein. 

The Morningstar Parties do not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. Neither the Morningstar Parties nor Third Wire makes any assurance that investment products based on an index will accurately track index performance or provide positive investment returns.

The Index uses advanced AI methodologies, including Long Short-Term Memory (LSTM) neural networks, to guide security selection and leverage adjustments. The effectiveness of these methodologies is not guaranteed and may be impacted by unforeseen factors or market conditions.

The Fund seeks to replicate certain characteristics of private equity buyout strategies by directly investing in the constituents of the Index but may not achieve the same results. Past performance is not indicative of future results. All investments involve risk, including loss of principal. Public equity investments are subject to market volatility, economic uncertainty, and potential deviations from the Fund’s intended strategy. There is no guarantee that the Fund will achieve its investment objectives or that investor returns will align with private equity performance.

The Fund is privately offered and is not registered under the Investment Company Act of 1940 or the Securities Act of 1933. As a result, it is not subject to the same regulatory requirements as registered investment vehicles. Investments in the Fund are illiquid, and redemptions may be subject to limitations or delays. Fees and expenses may impact overall performance. Investors should carefully review the private placement memorandum or other offering documents for a full description of fees, risks, and investment terms before making any investment decision.

This document is for informational purposes only and may be shared with the general public under Rule 506(c). Any offer to invest is made exclusively through the Fund’s private placement memorandum or other authorized offering documents and is available only to verified accredited investors. Verification of accredited investor status is required before any investment is accepted. The Fund is offered pursuant to Rule 506(c) of Regulation D, allowing for general solicitation; however, investment is limited to verified accredited investors who meet the necessary qualifications.

This document may contain forward-looking statements regarding the Fund’s strategy, investment process, or expected performance. These statements are subject to risks and uncertainties that could cause actual results to differ materially. No representation or warranty is made that any investment strategy, objective, or forecast will be achieved.

For More Information:

Media Contact:
David Beaver
Chief Marketing Officer
Third Wire Asset Management, LLC.
beaver@thirdwiream.com