Listed PE trusts: If you're focused on the discount, you'll miss the story

Focus on the advantages

clock • 4 min read
Steven Tredget of Oakley Capital

Steven Tredget of Oakley Capital

Whenever I speak to investors and advisers, it is only a matter of time before I am asked about the share price discounts to NAV that listed private equity companies trade at. “What are the causes of the stubbornly persistent discounts for many listed PE trusts?” “Will those discounts ever close?” and so on.

These are important questions but, sadly, there is little industry consensus on the answers. One reason for this is that the prism through which many people look at the sector creates misconceptions that actually entrench discounts. Instead, investors should focus on the distinct advantages of investing in private equity and the real driver of shareholder returns in the sector - capital growth - as growth in NAV per share is by far the largest driver of share price performance. Regrettably, a lot of commentary on the sector asserts that discounts are the primary method for evaluating ...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now


Already an Investment Week


More on Equities

Industry Voice: T. Rowe Price's 2022 Midyear Market Outlook summary

Industry Voice: T. Rowe Price's 2022 Midyear Market Outlook summary

Transitioning to a new paradigm

Ritu Vohora, Investment Specialist, Capital Markets at T. Rowe Price
clock 23 June 2022 • 2 min read
Amazon shares are down 40% from its peak

Growth stock pickers feel like 'a kid in a candy shop'

'It is time to go shopping'

clock 22 June 2022 • 4 min read
Sectors in the US stock market that have been leaders over the last decade have come to a sudden stop in terms of their outperformance of the broader market since the start of 2022.

Deep Dive: A paradigm shift for US equities

'Valuations matter'

clock 15 June 2022 • 5 min read