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 Ord47.72181.30429.4050.56628.00Buy
3i Group Plc Pref-----Buy
Aberdeen Private Equity Ltd GBP26.7468.28131.37-14.26152.05Buy
Apax Global Alpha Limited Ord Npv13.80---9.15164.00Buy
Better Capital 2009-32.5419.72-16.15-53.12125.86Buy
Better Capital 2012 Ord47.50-36.41-51.00-20.8642.96Buy
Candover Investments Plc Ord18.32-77.32-66.81-23.40156.00Buy
Dunedin Enterprise IT plc48.2339.5629.75-11.75515.00Buy
Electra Private Equity plc Ord27.60135.79212.92-68.705,544.00Buy
F&C Private Equity Trust Ord28.6194.93148.03-0.09356.81Buy
HarbourVest Global Private Equity Ord18.1169.63184.44-13.871,492.00Buy
HgCapital Trust plc Ord25.0187.04108.66-4.771,806.10Buy
ICG Enterprise Trust Plc Ord 10P28.2155.34123.97-6.11876.00Buy
JPEL Private Equity USD24.5570.72123.24-17.471.66Buy
JPEL Private Equity ZDP 2017 GBP1.199.9925.070.30105.68Buy
JPEL Private Equity Wts-----Buy
JZ Capital Partners ZDP 20221.56----Buy
JZ Capital Partners Ord0.5734.6544.72-31.55731.93Buy
LMS Capital plc-17.98-42.46-26.09-36.8274.00Buy
Mithras Investment Trust PLC31.0263.50114.83-6.53234.30Buy

ETFs

Name6 Months (%)1 Year (%)3 Years (%)5 Years (%)CurrencySector
DB X-Trackers LPX MM Private Equity UCITS ETF 1C GBP12.5323.6874.78140.14GBPEquity - Other SpecialistBuy
iShares Listed Private Equity UCITS ETF GBP9.7221.0073.24130.08GBPEquity - 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.