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 Ord56.39174.05445.0050.72628.00Buy
3i Group Plc Pref-----Buy
Aberdeen Private Equity Ltd GBP30.9367.48118.46-16.44150.20Buy
Apax Global Alpha Limited Ord Npv26.24---5.94160.00Buy
Better Capital 2009-28.12-2.09-18.99-54.71125.86Buy
Better Capital 2012 Ord60.91-41.20-53.29-20.8642.96Buy
Candover Investments Plc Ord44.44-74.62-61.76-12.27163.00Buy
Dunedin Enterprise IT plc15.97-0.1119.90-29.16506.10Buy
Electra Private Equity plc Ord36.13101.64215.77-70.545,544.00Buy
F&C Private Equity Trust Ord31.9574.74161.23-6.84350.99Buy
HarbourVest Global Private Equity Ord36.2674.90176.96-14.971,476.00Buy
HgCapital Trust plc Ord38.4382.41110.123.931,655.00Buy
ICG Enterprise Trust Plc Ord 10P30.2134.03116.30-15.53876.00Buy
JPEL Private Equity USD36.5667.2490.51-14.311.52Buy
JPEL Private Equity ZDP 2017 GBP2.1810.1732.861.34104.23Buy
JPEL Private Equity Wts-----Buy
JZ Capital Partners Ord18.5135.6782.56-30.76752.46Buy
JZ Capital Partners ZDP 20222.58----Buy
LMS Capital plc-9.75-37.99-15.48-28.0474.00Buy
Mithras Investment Trust PLC34.5259.21123.81-1.75223.40Buy

ETFs

Name6 Months (%)1 Year (%)3 Years (%)5 Years (%)CurrencySector
DB X-Trackers LPX MM Private Equity UCITS ETF 1C GBP7.2424.2661.62140.18GBPEquity - Other SpecialistBuy
iShares Listed Private Equity UCITS ETF GBP4.7724.0961.64128.01GBPEquity - 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.