Private Equity

[Guest]

Hello,

I have been wondering about private equity as an area for investment.

Does anybody here invest in private equity assets?

I have been intrigued by porca miseria mentioning them a number of times.

[porca misèria]

Hello,

I have been wondering about private equity as an area for investment.

Does anybody here invest in private equity assets?

I have been intrigued by porca miseria mentioning them a number of times.

My exposure to private equity is principally Venture Capital. That's (usually) Private Equity investing in small companies who traditionally found it hard to raise money. A typical VC investment takes place when a company has outgrown founders/angel investments but is too risky for the banks and too small for the stockmarket. Investors get juicy tax breaks in return for investing where others won't and helping small businesses to grow.

I'm not familiar with the kind of Private Equity fund that usually gets described in the mainstream media and uses lots of leverage to buy bigger companies including sometimes household names. Nor really with non-leveraged PE outside the VCT world. Though I keep meaning to find out more, with a view to adding some to my portfolio.

You could research PE funds starting at Trustnet to get a list of them and some very basic information, and if some of them look attractive you have the names and can dig deeper. Or if you want to acquire my VC habit (which now pays my rent in full), take a look at the introductory information and factsheets at Hargreaves Lansdown and Bestinvest before moving to Clubfinance for the best deals.

[Guest]

My exposure to private equity is principally Venture Capital. That's (usually) Private Equity investing in small companies who traditionally found it hard to raise money. A typical VC investment takes place when a company has outgrown founders/angel investments but is too risky for the banks and too small for the stockmarket. Investors get juicy tax breaks in return for investing where others won't and helping small businesses to grow.

I'm not familiar with the kind of Private Equity fund that usually gets described in the mainstream media and uses lots of leverage to buy bigger companies including sometimes household names. Nor really with non-leveraged PE outside the VCT world. Though I keep meaning to find out more, with a view to adding some to my portfolio.

You could research PE funds starting at Trustnet to get a list of them and some very basic information, and if some of them look attractive you have the names and can dig deeper. Or if you want to acquire my VC habit (which now pays my rent in full), take a look at the introductory information and factsheets at Hargreaves Lansdown and Bestinvest before moving to Clubfinance for the best deals.

Thanks for your reply porca miseria!

When you originally mentioned private equity, I did some research. This is what I came up with:

1. Venture Capital Trusts. They're able to invest in unquoted/unlisted of small business. Many also invest in AIM listed firms. High risk but if you are a new subscriber you get 30% tax back plus capital gains and dividends are tax free. I have been comparing their performance on the AIC statistics website: https://www.theaic.co.uk/aic/statistics/aic-stats
2. Private equity funds. Dedicated private equity firms with funds like SVG Capital who own big brands like Birds Eye, Hugo Boss and New Look.
3. Investment trusts with a leaning toward private equity. I'm thinking RIT Capital Partners and Dunedin.

Seems like you prefer VCTs. I am planning to add them to my portfolio too. You would deliberately hold them outside of a tax wrapper and I would use them to force cash flow. (Tax free dividends and a tax break for new issues.)