The Lemon Fool

Do any fools invest in Private Equity Trusts?

I often look on the AIC website and see these Trusts trading at huge discounts.

But looking further, I am put off by the fees, the leverage, the opaque disclosure and the lack of liquidity.

Any thoughts anyone?

There is a topic on here called Private Equity Upside. I will see if I can post a link.

[url]viewtopic.php[/url]

Hm Not sure that worked.

Dumbo wrote:Do peany fools invest in Private Equity Trusts?

I often look on the AIC website and see these Trusts trading at huge discounts.

But looking further, I am put off by the fees, the leverage, the opaque disclosure and the lack of liquidity.

Any thoughts anyone?

I have held APEO (SLPE that was) for 6 years now. Works for me.

You mention 'lack of liquidity'. I have top-sliced on 3 occasions without any difficulty.

Dumbo wrote:But looking further, I am put off by the fees, the leverage, the opaque disclosure and the lack of liquidity.

All probably true. However, as I understand it the trend is for companies to stay private for longer before listing and Private Equity now represents a larger portion of the global economy, so in my view it's important to have Private Equity exposure. I have some but probably not enough. Neuberger Berman (NBPE) is my pure play Private Equity choice. I have held for many years and add from time to time. They have a different approach to many other Private Equity Investment Trusts (making direct investments alongside a Private Equity house leading the transaction) so worthwhile studying their latest investor presentation to see if it appeals. NBPE's investments are skewed to the USA which I like. I also hold 3i Group (III) whose investments are skewed to Europe. Their portfolio is dominated by a large position in a company called Action which owns an expanding portfolio of budget stores which I think is a good place to be right now. They also have a large position in 3i Infrastructure (3IN) which I also like.

I also get Private Equity exposure through multi-asset vehicles like Caledonia Investments (CLDN) and RIT Capital Partners (RCP) and Alternative Asset Managers (Blackstone (BX), Brookfield (BAM and BN) and KKR).

All are long term holdings. I have never sold a share in any of the companies above. All have been rewarding investments (for Brookfield I include my prior time in Oaktree Capital which was acquired by Brookfield).

For the first time in a while I have some excess cash and may well add to one or more of NBPE, III, RCP, BAM and BN.

Whatever you do, best of luck,

Pendrainllwyn

Thanks for the info everyone, v.helpful.
Still undecided about the way forward but that goes for everything at the mo, not just PE.
3i looks interesting to me, so I'll keep an eye on that and jump in at some point.

If you don't mind buying a global equity investment trust, F&C Investment Trust (FCIT) has about 12% private equity in its portfolio and has achieved a total return of about 11% per year on average over the past 20 years.

Oh really, didn't know that. I did know the Bailly Gifford IT's had quite a high exposure to PE.

For someone like myself, a plain vanilla investor, that's probably a better way to get exposure to PE, rather than trying to sort out the right PE Company to invest in. A Global portfolio with a small exposure to PE sounds the right way to go for me.

Thanks LooseCannon101.