'Excessive' discounts offer PE trust buying opportunity despite short-term woes

Discounts at pandemic lows

Private equity investment trust investors have rushed for the exits again this year, with discounts trading at pandemic lows, but analysts see scope for re-rating despite the looming challenges for the sector.

Earlier this week, Investment Week reported that Baillie Gifford's £5bn multi-asset team was mulling an allocation to private equity investment trusts in light of their large discounts.  "They are interesting, even if we think that the net asset value of those funds are a little bit stale, because they are selling on a mighty big discount," said Scott Lothian, portfolio manager at the Edinburgh-based investment firm. Although the sector has historically traded at a discount, with exceptions such as HgCapital in 2021, they have materially widened this year, with many funds trading on o...