Over the last 40 years, private capital has become a key component of the investment strategies pursued by investors including pension schemes, sovereign wealth funds, endowments and high-net-worth individuals. This LPeC white paper examines why this is, the investment rationale for an allocation to private capital and the routes open to a public markets investor to gain exposure to private capital.
This paper 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.
It covers how:
• 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 is becoming increasingly attractive as the number of high-growth high-return private companies coming to the stock market continues to decline
• An allocation to listed private capital is highly complementary to more traditional asset allocation strategies given the range of risk/return profiles it offers