In an era of low interest rates, investors’ hunt for yield has created skews, distortions and perhaps even bubbles in both financial markets and the real economy. In turn, this has led to growing focus on the price and valuation of two types of asset: publicly traded securities, and real estate.
Less remarked upon has been the explosion in capital flows towards private equity, a trend which Verdad Management founder Daniel Rasmussen described as “the great post-crisis private equity gold rush” in a 2018 article for the journal American Affairs.
To many UK retail investors, it’s a corner of finance that can seem distant, prohibitively expensive or closed off entirely. But London is home to several listed private equity (PE) firms such as FTSE 250 constituents 3i (III) and Intermediate Capital (ICP) (which offer a share in those fund managers’ gains), as well as so-called 'funds of funds' including Pantheon International (PIN) and HabourVest Global Private Equity (HVPE) (which spread their investments across multiple funds). Many more individual funds offer some exposure towards the sector.