Disclosure – Non-substantive Research
This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour.
Appearances can be deceptive. In our view, discounts widening across the listed private equity sector is not an indication that their portfolios are worse positioned for the COVID era. Indeed we believe there is evidence that, in many cases, their portfolios of companies have been highly resilient; some are actually significantly better positioned than listed equity indices.
As the dust from COVID settles, companies’ operational performance over this period will start to get better reflected in valuations. From our perspective these valuations look like they will show that the majority have dealt with challenges well and, on a relative basis, have outperformed public markets. With more evidence of this resilience coming through, and with discounts still remaining significantly wider than they started the year, the attractions of the sector remain strong. We look at which are really wilting toffs, and which are the toughs.
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