Private Equity

Introduction to Private Equity

Private equity funds pool the resources of institutional and retail investors to invest in companies that are not yet listed on public markets. They will provide seed or development funding for new and growing businesses. That capital may then be used to fund acquisitions, develop new products or build new infrastructure. Investing at this early stage in a company's development can bring significant returns, but may also bring significant risks.

In return for their investment, investors will receive a share of the profits and will own a portion of the company. When that company is sold, or floated on the stock exchange, investors will also receive a portion of the proceeds.

Private equity funds will aim to mitigate risk by having a series of different investments, though many specialise in particular areas such as technology. Private equity investments are high risk and illiquid. As such, the majority of private equity funds are structured as closed-end investment companies and investment trusts. They will also tend to suffer in a difficult economic climate, when smaller companies tend to go bust. However, they can add both racier returns and diversification to a portfolio.

The tax treatment of investments is subject to tax law and HMRC practice which are subject to change. 

Investment Trusts

Name1 Year (%)3 Years (%)5 Years (%)DiscountNAV
3i Group Plc Ord60.71168.69463.1053.56604.00Buy
3i Group Plc Pref-----Buy
Aberdeen Private Equity Ltd GBP34.0670.52112.71-14.95149.77Buy
Apax Global Alpha Limited Ord Npv28.77---6.33160.00Buy
Better Capital 2009-31.35-12.08-20.95-55.51125.86Buy
Better Capital 2012 Ord59.84-46.90-55.47-23.7742.96Buy
Candover Investments Plc Ord50.93-75.02-63.43-12.96163.00Buy
Dunedin Enterprise IT plc11.18-5.7121.09-30.55506.10Buy
Electra Private Equity plc Ord37.97107.57220.54-69.685,544.00Buy
F&C Private Equity Trust Ord43.5979.50173.71-2.85350.99Buy
HarbourVest Global Private Equity Ord36.8783.09177.33-15.301,477.00Buy
HgCapital Trust plc Ord42.4484.83113.801.511,655.00Buy
ICG Enterprise Trust Plc Ord 10P31.1437.05107.40-16.19871.00Buy
JPEL Private Equity USD32.7261.2282.91-15.601.49Buy
JPEL Private Equity ZDP 2017 GBP2.6810.0738.031.69103.50Buy
JPEL Private Equity Wts-----Buy
JZ Capital Partners Ord29.7741.6695.76-28.30769.20Buy
JZ Capital Partners ZDP 20226.11----Buy
LMS Capital plc-18.56-39.56-22.73-28.1771.00Buy
Mithras Investment Trust PLC41.0355.86125.34-1.07223.40Buy

ETFs

Name6 Months (%)1 Year (%)3 Years (%)5 Years (%)CurrencySector
DB X-Trackers LPX MM Private Equity UCITS ETF 1C GBP10.5530.8159.89151.95GBPEquity - Other SpecialistBuy
iShares Listed Private Equity UCITS ETF GBP9.2329.9465.21136.55GBPEquity - Other SpecialistBuy

Disclaimer

Interactive Investor does not endorse any particular product. If you are unsure about whether an investment is suitable for you please seek advice from a financial advisor.