Answer
The constituents are selected based on a detailed index methodology, available here. Briefly, it relies on:
Determining a country’s eligibility to be part of the index based on PE/VC investment attractiveness
Determining country weights factoring the size of its economy adjusted for public sector and Foreign Direct Investment restrictiveness
Determining sector weights within each country.
With these country and sector weights, our indices include the private companies with the largest shadow price in each country-sector combination till the desired weights are arrived at for each country-sector.
Our methodology also allows for our indices to be rebalanced annually to adjust for changes in country/sector weights. It also allows changes at a monthly level for companies that become ineligible due to dissolution, bankruptcy, or being acquired by another public or private company.
All index maintenance also presents a trade-off between representativeness and turnover, which is overseen by a team of expert index committee members.