Listed Private Equity Sector
Listed Private Equity comprises entities listed on international stock exchanges whose main activity is investing in private companies or private equity funds.
Most investors are aware of private equity as an asset class. Private equity is capital invested by a firm of professional managers in an unlisted company usually in return for a significant or controlling stake in the business. Private equity has traditionally generated superior returns to listed equities, albeit with higher risk. Typically, however, access to unlisted private equity funds is not available to all but the largest of institutional investors. Furthermore, investors’ capital is usually required to be committed and drawdown over a period of up to five years, with up to ten years required to fully realise an investment in the fund.
Listed Private Equity provides access to private equity investments and returns but with the added advantages that come with being listed, such as liquidity, immediate diversification and investment, and a reduced J-curve.
The sector is covered by a variety of indices, the most comprehensive of which is the LPX 50 TR compiled by LPX GmbH. The LPX 50 TR covers the 50 largest and most liquid securities in the Listed Private Equity universe.