Join our community of smart investors

It pays to pay for private equity

It can be worth paying higher fees when investing in private equity investment trusts
It pays to pay for private equity

Like it or loathe it, private equity is becoming an increasingly important part of capital markets. Improved sentiment, low interest rates and excess capital in fund managers' pockets have resulted in money flooding into sector in recent months. And despite an uptick in companies listing on public markets this year, the overall trend is down. According to Statista, 2,010 companies were listed on London Stock Exchange (LSE) at the end of July, down from 2,429 in January 2015. 

While investing in private equity is mainly the preserve of institutions, small individual investors can access the sector via private equity investment trusts. Financial planners suggest that investors who have the necessary risk appetite and investment time horizon to invest in this asset could have between 5 and 10 per cent of their portfolios allocated to it.

According to data provider Morningstar, there are around 25 private equity investment trusts listed in London. These can be broadly split into two camps: funds of private equity funds and funds which directly invest in private equity. 

To continue reading...
Join our Community of Smart Investors
  • Independent full-length company analysis
  • Actionable investment ideas and recommendations
  • Expert investment tools and data
  • Stock screens from Algy Hall
Have an account? Sign in