Listed PE discounts seen as buying opportunity

A survey of delegates found 88% believe the historically large discounts currently seen on most listed private equity vehicles are attractive for those looking to buy into the asset class.

Respondents were also relatively confident that listed fund managers were providing accurate net asset value (NAV) figures, with 51% saying they were fairly confident and 21% who felt very confident regarding published valuations.

The findings will be welcomed by listed fund managers, many of which have suffered from deep discounts since the onset of the financial crisis and, thus far, the asset class has seen little in the way of recovery compared to other investment trusts.

LPEQ's delegates also revealed their desire to see more cash returned to shareholders, a departure from the usual listed private equity model, which has been highly focused on capital growth. Almost two thirds of respondents said private equity funds should seek to return more cash to shareholders, with 54% saying this should be done by paying regular dividends.

Some listed funds have already announced plans to pay regular income to shareholders, though it is too early to say whether these have helped narrow discounts over the long-term.

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