Buzz Archive:
Listed Funds: Will 2008 Be Their Year?

by Simon Witney, Partner, SJ Berwin LLP, 12/20/2007

Much ink has been spilt on the subject of listed private equity funds during 2007. As some funds decided to access permanent capital on Europe's stock markets, London tried to attract more of that business from Amsterdam and many predicted a stampede to list. The same has been tried in the U.S. with the GSTrue market place. However, more difficult market conditions, and falling share prices among some of those newly quoted funds, knocked the trend sideways - leaving some arguing that the traditional private model would continue to dominate private equity fund structures, and that other alternative asset classes might be more profitable targets for stock markets eager to attract business.

Of course, the reality is that both listed and unlisted vehicles have their place in the private equity universe - and have done for many years. It's insightful to once again look at the UK and European model (editors note: yes, you detect the sarcasm--a not so subtle note to Hank Paulson and our other US regulator friends--the Europeans are being pro-business and pro-active).

Specifically, the UK regulators have enabled "Private Equity Investment Trusts" (PEITs) to open up private equity further to retail investors. PEITs are closed-ended investment companies traded on the main market of the London Stock Exchange. In all, they have a market capitalisation of around £10 billion (€14 billion). And this week, preeminent barrister Simon Witney from SJ Berwin reviews the status and future of listed private equity funds for 2008 and beyond.