A world of ultra-low/negative interest rates, compressed equity yields and other features of massive central bank money printing has encouraged a move into private market investments such as private equity. But getting access isn't always easy. LPeC Chief Executive Deborah Botwood Smith looks at how listed private equity provides a seat at the private equity table for the retail or smaller investor and why they should be interested.
The lasting impact of COVID-19 on our economy and society has yet to reveal itself. Those who manage money do so in a period of profound turbulence. Wealth managers will rightly want to consider the widest range of options. Why should smaller investors be interested in private equity? Diversification and long term relative performance. It is not a minority sport open only to a premier league of major pension funds, insurance companies, sovereign wealth funds and sizeable private foundations who can write the necessary big tickets and are unconcerned by lack of immediate liquidity. Listing private equity funds on public markets democratises access and makes it quick and easy for smaller investors to participate for the price of a share, buying and selling when the time is right for them. At the very least, wealth managers should look at listed private equity and ask what they might be missing.