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Private equity: bargain investment trusts surge ahead

Private equity investment trusts are an unloved sector, but have shone since the outbreak of Covid-19
Private equity: bargain investment trusts surge ahead
  • Recent updates suggest that private equity investment trusts have flourished during the pandemic
  • Growth-oriented portfolios are holding up well, but this is not reflected in the wide discounts across the sector

In hindsight, forcing swathes of the world’s population to stay at home can have some fairly obvious investment consequences. Digitally-driven businesses have tended to thrive, while anything relying on personal interaction has faced existential challenges.

All of this was reflected well in public market valuations once national lockdowns bedded in. But not everything in life is so clear: as we mentioned last year (IC 21 August 2020), lengthy delays on net asset value (NAV) updates have left investors to make educated guesses about the performance of private equity investment trust portfolios. Many trusts in the sector only tend to detail NAV performance to the ends of June and December, respectively, and in both cases this can be subject to a significant lag.

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