This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. This material should be considered as general market commentary.
We have written plenty of paeans to private equity in the past. Despite our strong belief in the listed private equity (LPE) sector, there are clearly plenty of investors who take the opposite view to ours, given that discounts to NAV are at historically-wide levels. We discuss what happens if we look at these trusts in a different way and adopt the same view that ‘corporate raider’ Edward Bramson did with Electra, imagining them not as highly-effective compounders of capital, but as trusts pregnant with value. Making some basic assumptions, we have built a model which we believe serves to illustrate how attractive valuations are at current levels; not just the share price discount to NAV, but also the latent value that might rest within portfolios, too.
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