Information drought hampering listed private equity

The findings revealed that 30% of those questioned felt unable to buy listed private equity (LPE) stocks because of an absence of data, be it from the funds themselves or from external sources.

The survey of 100 LPs, which was conducted on behalf of LPEQ, the group of listed private equity vehicles formerly known as iPEIT, also found that only 9% of interviewees had had a consultant discuss LPE opportunities with them.

This could be part of the explanation behind the large number of respondents who either hadn’t considered LPE as part of their asset allocation, or didn’t even know such a thing existed. Fifty-three percent of those surveyed did not have a mandate to invest in listed PE.

LPEQ chairman, Ian Armitage of Hg Capital, said: “It’s clear that those LPs who invest in listed private equity are fans, but many are missing out because comprehensive information is rarely accessible in one place and because of lack of guidance from consultants. LPEQ is committed to improving information to everyone on what we do, how we value our portfolios, how we make returns – and how good those returns are over the cycle.”

Other findings include 92% of investors intend to maintain or increase their LPE holdings, and 47% holding such stocks for five years or more. Eighty-two percent of LPs also view the current NAV discounts as a buying opportunity.

The report also throw up some comparisons between asset allocations between institutions and wealth managers. Whilst the latter take a portfolio approach and typical invest in around six vehicles – with 12 or more not uncommon – institutions took a more selection approach. Seventy-five percent of those who revealed their holdings had shares in three or less LPE funds.