Investors seem to be wary of Listed Private Equity (LPE) despite continuing strong returns being delivered by funds within the sector, and discounts remain significantly wider than the investment trust sector as a whole. Corporate activity, on the other hand, is significant - suggesting that some see value in these portfolios.
Demand for Venture Capital Trusts (VCTs) has doubled this year from last year, and the venerable Scottish Mortgage - the UK's largest listed investment vehicle and a popular fund among private investors - has been decisively ramping up its exposure to private (unlisted) equities.
The biggest fear investors have is, that at the current stage in the economic and stock market cycle, we might see a repeat of the carnage which struck the sector in 2008. There are reasons, however, to think a repeat is unlikely. Certainly balance sheets are less stretched than during the credit crisis, and with several multi-manager funds available to reduce specific manager risk, there are other ways to invest in the sector with more diversified risk.
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