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 Ord18.85101.35228.6630.67701.00Buy
Apax Global Alpha Limited Ord Npv-1.41---16.97165.00Buy
Better Capital 2009-41.72-14.87-45.46-45.41114.48Buy
Better Capital 2012 Ord-6.75-42.77-63.61-47.0945.36Buy
Dunedin Enterprise IT plc66.0293.1067.87-22.94489.20Buy
Electra Private Equity plc Ord-8.3867.29138.28-58.561,981.00Buy
F&C Private Equity Trust Ord13.4687.91134.812.73357.23Buy
HarbourVest Global Private Equity Ord-0.8939.83105.55-19.421,519.00Buy
HgCapital Trust plc Ord23.1485.4586.87-3.061,877.40Buy
ICG Enterprise Trust Plc Ord 10P19.9659.3295.13-10.32930.00Buy
JZ Capital Partners Ord-14.8327.9412.91-30.92706.44Buy
JZ Capital Partners ZDP 20224.34----Buy
LMS Capital plc11.82-36.81-31.69-39.3880.00Buy
Mithras Investment Trust PLC27.3782.48125.331.18255.00Buy
NB Private Equity Partners Limited-3.4841.60109.19-21.381,221.13Buy
NB Private Equity Partners Limited 2022 Zero Div Perf SHS NPV6.35----Buy
Northern Investors Company PLC-32.504.07100.13-5.53237.10Buy
Oakley Capital Investment Ltd ORD 1P (DI)12.484.0110.88-31.84245.00Buy
Pantheon International Plc10.0347.5885.69-15.192,263.80Buy
Princess Private Equity Holdings Limited Ord EUR0.001 (EUR)10.7357.41116.54-5.1610.86Buy

ETFs

Name6 Months (%)1 Year (%)3 Years (%)5 Years (%)CurrencySector
Xtrackers LPX Private Equity Swap UCITS ETF 1C GBP-4.463.8137.1074.26GBPEquity - Other SpecialistBuy
iShares Listed Private Equity UCITS ETF GBP-5.740.1135.0369.03GBPEquity - 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.