The dataset includes detailed information on the exact month and value of each cash flow in U.S. dollars and the most recent mark-to-market valuation of investments that remain in the portfolio. This information allows for precise tracking of the performance of each investment over time. Additionally, each investment is assigned a ”vintage year”, defined as the year when the first cash flow was made to the company or fund, providing a clear timeline for the start of each investment. This enables robust investment performance analysis across different periods. Our dataset encompasses investments in funds and individual companies. We employ IFC’s internal sector classification, resulting in 22 sectors.<sup>4</sup> The “Finance and Insurance” sector has concentrated close to 30 percent of the overall IFC portfolio and has the largest share in the historical IFC portfolio. Next come “Collective Investment Vehicles” or Funds with 27 percent, followed by “Oil, Gas & Mining” with 7 percent (Figure 1).<sup>5</sup> Collective investment vehicles are pooled investments that gather capital from multiple investors to invest in a diversified portfolio of assets. These vehicles enable IFC and other investors to access a range of investments, including venture capital and growth equity funds. By pooling capital, funds offer investors the benefits of diversification, professional management, and shared risk. Our data, however, do not include information about the specific sub-sectors that funds invest in.

The prominence of Finance and Insurance is recent, even though IFC’s portfolio has been heavily concentrated in 5 sectors from the start. The composition of this concentration, however, has changed over time. From 1970 to the early 1990s, IFC invested heavily in equity in Manufacturing. From the second half of the 1990s, the Finance sector and Utilities rose to the top of IFC’s equity portfolio.

# **3 Measuring equity returns**

This section presents performance metrics for investment sectors in EMDEs viewed through the lens of a well-diversified international investor. We utilize metrics that focus on public market comparisons and take into account annualized returns.

**Public Market Equivalent (PME):** The PME is a financial metric used to evaluate the performance of private equity investments by comparing them to the returns of public market indices.

> 4These sectors are the following: Accommodation & Tourism Services, Agriculture and Forestry, Chemicals, Collective Investment Vehicles, Construction and Real Estate, Education Services, Electric Power, Finance & Insurance, Food & Beverages, Health Care, Industrial & Consumer Products, Information, Nonmetallic Mineral Product Manufacturing, Oil, Gas and Mining, Plastics & Rubber, Primary Metals, Professional, Scientific and Technical Services, Pulp & Paper, Textiles, Apparel & Leather, Transportation and Warehousing, Utilities, Wholesale and Retail Trade.

> 5As a result of its focus on accelerating an equitable and just energy transition, the World Bank Group has not financed any new coal-fired power project since 2010, and no oil and gas projects since 2019 that involve exploration, drilling, and extraction (upstream). The World Bank has not financed any oil pipelines since 2014.

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