Permanent capital - the way forward?

The launch of the London Stock Exchange's Specialist Fund Market (SFM) has been underwhelming at best. The market will celebrate its second birthday this November, and yet has only attracted a few funds: Da Vinci Capital Management, which listed in May 2008; Marwyn Value Investors; and lastly IRF European Finance Investments. Now Neuberger Berman has announced plans to list its Euronext Amsterdam-quoted fund-of-funds, formerly Lehman Brothers Private Equity, on the SFM.

This would mark the exchange's biggest coup, since it is widely believed that the relative success of Euronext in attracting vehicles back in 2006 is what inspired the LSE to offer an alternative. But SFM has so far mostly attracted funds already listed on AIM and so simply shifted its own assets. NB Private Equity Partners will in fact pursue a dual listing on London and Amsterdam, where it is already listed.

Private equity has long deemed stock markets a source of permanent capital, either listing entire management companies or just a fund or trust.

LPEQ, the trade group for European listed private equity, announced last week that Belgium-based Gimv NV has become its 16th member, taking LPEQ's representation to 25% of Europe's tradable private equity companies. LPEQ chairman, HgCapital's Ian Armitage, explained in a statement: "Listed private equity enables institutions to invest in a more liquid form of private equity than ten-year LP funds. It also offers instant access to diverse portfolios of individual companies or funds without the effects of the j-curve of a new fund."

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