Chase de Vere’s Patrick Connolly is also fairly lukewarm. “Some may see the wide discounts as a buying opportunity, but we feel they are more an indication of the volatility of these funds, which should only be considered for high net worth clients who already have a diversified portfolio in place and accept the risks involved.
“We prefer to get exposure to private equity through traditional venture capital trusts, which can combine proven investment management skills with attractive tax breaks,” Mr Connolly adds.
Nevertheless, those who find an investment in pure private equity trusts a step too far should be aware that a lot of vehicles in the global growth and flexible investment sectors also have some limited exposure to this asset class. The Henderson Alternative Strategies Trust, which has one of the largest holdings in private equity products, increased this from 22 per cent to 30.7 per cent in 2015.
Lead manager Ian Barrass says: “In addition to properly aligned and quality management, the shareholders in private equity investments are very limited in number, so if they want to make a change they can do so quickly and decisively. We see a lot of value here but it’s always a sector that seems to have difficulty getting traction from investors.”
Edmund Tirbutt is a freelance journalist
