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Play the PE fund march with MJ Hudson

Recent M&A activity suggests the Aim-traded group might be undervalued and could be next on the block.
July 15, 2021

Private equity funds are busy right now. This is what happens when low interest rates combine with an ocean of yield-hungry capital and a pandemic-induced dent to valuations. The UK, seen as a friendly environment for acquirers, has lately become a highly active feeding ground for these funds.

Tip style
Value
Risk rating
High
Timescale
Short Term
Bull points
  • Selling picks and shovels to PE
  • Strong earnings growth projected
  • Discount to Sanne bid multiple
  • Accruing a dividend
Bear points
  • Limited free cash generation
  • Choppy recent advisory trading

But how do ordinary retail investors get in on the action? One way is to invest in one of the private equity investment trusts that trade in public markets. Another strategy might be to simply buy the FTSE 350 Index and wait for the next wave of takeover offers.

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