WEALTH WATCH
Private equity’s image changing
Unless investors commit for 10 years in retail products, they will be paid a large discount, writes Stephen Cranston
Of all the investment classes, private equity is the one that depends least on charts and spreadsheets and most on shoe leather. I was fascinated to hear that doing four deals in a year would count as an exceptionally busy 12 months. They are the direct opposite of hedge funds. But they might reject 100 deals before narrowing down their options. And once they have chosen their final selections, the due diligence is infinitely more detailed than anything done by conventional asset managers. It used to confuse me that private equity was not aimed at private clients. It is largely an institutional product. Only Old Mutual and Momentum have offered bite-sized retail products investing in a range of private equity portfolios. Investors realistically need to commit for 10 years, and if they sell out they will be paid a deep discount. Another more manageable way in is to buy Ethos Capital shares. It invests in funds run by Ethos, the premier private equity manager in SA. This is especially...
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