Listed private equity offers the opportunity for stock market investors to participate in a diversified portfolio of unlisted companies, otherwise available only to large institutions.

• Access: shares in listed private equity companies are easily traded on stock exchanges.
• No barrier to entry: LPE has very low entry requirements: namely, the price of a share.
• Choice: the sector is diverse, offering a wide range of private equity investment, as each listed fund manager has different investment strategies and criteria.
• Simplicity: Listed vehicles handle the cash management and administration, which can be complex for Limited Partnership interests. All listed private equity investors need to do is monitor the value of their shareholdings in the quoted vehicle itself.

Other features of LPE

• Bid/ask spreads can often be quite wide, and particularly large orders might not be filled instantaneously.
• Listed private equity firms can use debt to finance the portfolio, which can enhance returns, while potentially increasing downside risk. At other times, the listed company may have a great deal of net cash in the portfolio, which can reduce risk but may drag on performance.
• Shares in listed private equity companies trade at a discount or premium to their Net Asset Value (NAV), which can result in volatility.
• Listed private equity is best suited to long term holding rather than frequent trading