Private equity trusts often tend to go cheap, and it is difficult to spot genuine opportunities in a sector full of apparent bargains. But HarbourVest Global Private Equity (HVPE) has looked undervalued for months and it is difficult to understand why.
- One-stop shop for private equity
- One of the widest discounts in the sector
- Well diversified with solid track record
- Could benefit from US election outcome
- Complicated structure
- Sensitive to interest rates
- Asset class still under pressure
The sector has been out of favour for a long time. In December 2021, when the stock market was buoyant, interest rates were low and other sectors such as infrastructure boasted hefty premiums, most private equity trusts were trading on double-digit discounts to net asset value (NAV). Over the years, many have argued that this pessimism is unwarranted – with some justification, given the impressive long-term performance of some of these investments. Agree or disagree, this does mean that, within private equity, a discount to NAV does not mean much per se.