How to invest in private equity

If you want access to fast-growing private businesses, then finding the right private-equity fund is your only sensible option. Luckily, the UK stockmarket boasts some of the best private-equity funds, says David C Stevenson.

Regular readers will know that I have my doubts about the private-equity industry. For me, it signifies much of what's gone wrong with global finance over the last few decades, especially the overreliance of these dealmakers on leverage (borrowed money) and the eye-wateringly high fees they charge. But I'm also the first to admit that if you do want access to fast-growing private businesses, then finding the right private-equity fund is probably your only sensible option.

Luckily, the UK stockmarket boasts some of the best private-equity funds, many of which give you the chance to invest directly with the managers themselves via their listed fund structures. Well-known outfits such as 3i (LSE: III) represent a great way of playing the sector, although my long-term favourite fund has to be HgCapital (LSE: HGT), which I have consistently championed on these pages. HgCapital's share price is up almost 40% over the past 12 months but recent results suggest that we may be due for even more growth in the near term.

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David C. Stevenson
Contributor

David Stevenson has been writing the Financial Times Adventurous Investor column for nearly 15 years and is also a regular columnist for Citywire. He writes his own widely read Adventurous Investor SubStack newsletter at davidstevenson.substack.com

David has also had a successful career as a media entrepreneur setting up the big European fintech news and event outfit www.altfi.com as well as www.etfstream.com in the asset management space. 

Before that, he was a founding partner in the Rocket Science Group, a successful corporate comms business. 

David has also written a number of books on investing, funds, ETFs, and stock picking and is currently a non-executive director on a number of stockmarket-listed funds including Gresham House Energy Storage and the Aurora Investment Trust. 

In what remains of his spare time he is a presiding justice on the Southampton magistrates bench.