What is driving listed private equity?

With discounts on listed private equity trusts almost back to long-term averages, value in the sector can be hard to find. But Ben Williams, investment manager at Saunderson House, argues the improving merger and acquisition market is likely to benefit the asset class in 2015

The outperformance of listed private equity investments over traditional quoted equity markets, such as the FTSE All Share index, continued in 2014, much the same as it has over the past several decades (see chart 1). This outperformance has primarily been driven by the potential for private equity managers to participate in a large and growing marketplace of non-public, high-growth companies not available to mainstream investors, as well as their ability to create value by proactively influencing and interacting with invested companies' management, and taking more aggressive operational ...