l Co-investments: Investing alongside private equity managers directly into companies. This can be cost-effective as there are lower or no management fees charged on co-investments by the underlying private equity manager.
There are significant barriers to entry for those seeking to invest their capital in private equity. But by buying shares in a listed private equity investment trust retail investors can gain access to the opportunity to participate in a managed, diversified portfolio for the minimum price of one share.
By buying shares in a listed private equity company, investors can also benefit from the administrative simplicity and liquidity obtained from buying and selling shares trading on an exchange. Also, the capital gains retained within an investment trust structure are not subject to corporation tax.
Global deal activity has remained active in private equity over the past year and this trend looks set to continue. For investors looking for attractive risk-adjusted returns over the long term, private equity has strong credentials and can offer significant alpha and diversification benefits when added to a wider portfolio of assets.
Andrew Lebus is manager of Pantheon International