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Listed Private Capital - Accessing attractive investment returns through the private capital markets

Over the last 30-40 years, Private Capital has increasingly become a key component of the investment strategies pursued by a range of investors, including pension schemes, sovereign wealth funds, endowments and high-net-worth individuals. This paper seeks to examine why this is the case, the investment rationale for making an allocation to Private Capital and the different routes open to a public markets investor to gain an exposure to Private Capital.

Private Capital is generally defined to include private equity, private debt, private real estate, infrastructure and natural resources, but in this paper, we focus primarily on private equity and private debt and, in particular, the attractiveness of gaining access to these asset classes through Listed Private Capital companies.

This paper proposes that:

• Listed Private Capital enables a public markets investor to secure a range of benefits associated with Private Capital, including access to a broader opportunity set, higher risk-adjusted returns, enhanced yield, improved portfolio diversification, protection against inflation risk and attractive cash-flow profiles;

• Listed Private Capital becomes ever more attractive as the number of high-growth high-return private companies coming to market continues to decline; and

• An allocation to Listed Private Capital is highly complementary to more traditional asset allocation strategies given the range of returns profiles LPC offers

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Listed Private Capital enables a public markets investor to secure a range of benefits associated with Private Capital, including access to a broader opportunity set, higher risk-adjusted returns, enhanced yield, improved portfolio diversification, protection against inflation risk and attractive cash-flow profiles.