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Advantages of listed private equity

Advantages of listed private equity

How does listed private equity facilitate access to this asset class?

Traditional Private Equity

  • High minimum commitments (typically £5m+)
  • 10-year commitment to fund with limited to no liquidity
  • Diversification requires allocation to multiple managers
  • Leading managers are often closed to new investors
  • Significant administrative and tax reporting burden
  • Ongoing cash management requirement
VS.

Listed Private Equity

  • Low minimum investment
  • Closed-end structure provides liquidity, shares traded daily
  • Access to experienced investment teams, with access to high-quality managers and/or deal flow
  • Benefit from a diversified underlying portfolio
  • Investment trust structure allows for re-investment of capital proceeds, tax-free – compounding returns

Private equity is not a simple asset class to navigate, barriers to entry are high and manager selection is key as the dispersion of returns is far wider than other asset classes. To safeguard against mediocre returns, extensive due diligence on the private equity manager, its track record, investment strategy and competitive differentiators is essential, as are strong relationships with those top performing firms, as the funds they manage are often hard to access due to huge investor demand. It is also an illiquid asset class and traditional private equity funds are difficult for most private investors to access. Minimum commitment sizes are typically at least £5m, and investors commit to a long-term obligation to fund investment programmes, typically through a 10-year fund.

Listed private equity companies are ‘evergreen’, reinvesting proceeds from the sale of investments, free of capital gains tax, into new investments, compounding returns and providing shareholders with long-term capital appreciation. In addition, recognising the importance of a reliable source of income for shareholders, some listed private equity companies pay dividends from realised capital profits, allowing shareholders to participate, to some degree, directly in the proceeds of the realisations from the underlying portfolios. The long-term horizon of private equity means that listed private equity is best suited to long-term holding, rather than frequent trading.

Finally, London listed investment trusts are supervised by boards of directors, who are typically all independent and who oversee the manager’s accountability to shareholders.

Share price (ICGT)

1,130p
-10.00P (-0.88%)
4:21AM 17 Oct 2021
The share price information is delayed by at least 15 minutes

Net Asset Value

1,523p
As of 31 July 2021
Next update: Q3 results for quarter ended 31 October 2021
Year Net assets NAV per share Share price Dividends per share
Jan 2021 £952m 1,384p 966p 24p
Jan 2020 £794m 1,152p 966p 23p
Jan 2019 £731m 1,057p 822p 22p
Jan 2018 £664m 959p 818p 21p
Jan 2017 £613m 871p 698p 20p
Jan 2016 £521m 731p 545p 11p
Jan 2015 £507m 695p 575p 15.5p
Jan 2014 £494m 677p 563p 15.5p
Jan 2013 £460m 631p 487p 5p
Jan 2012 £415m 569p 357p 5p
Jan 2011 £389m 534p 308p 2.25p
Dec 2009 £338m 464p 305p 2.25p
Dec 2008 £327m 449p 187p 4.5p