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How does PECCS™ differ from other PE taxonomies?

Answer

Most other taxonomies used in private markets focus on the investment vehicle rather than the private company or asset itself. However, the fundamental unit of value creation in private markets is the private company and its cash flows, and PECCS groups entities at this level rather than at the level of an investment vehicle. Such a focus keeps PECCS fit for purpose and avoids misclassifying assets due to strategy changes at the vehicle or assigning different classifications for slices of the same company.

Taxonomies used for publicly listed companies focus on the correct entity but over-emphasise the Industrial Activity pillar whilst ignoring other potential risk factors, which are especially important for private companies without valuation histories.

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