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Investment Trust Insider on Princess Private Equity

Investment Trust Insider on Princess Private Equity

It is 10 years since Princess Private Equity (PEY) listed in London. This private equity fund has had an interesting history, largely by virtue of its willingness to adapt to make itself more appealing.

Prior to listing in London, Princess had a listing in Frankfurt but it wanted to make itself more available to UK-based investors. It had some success in attracting new shareholders. However, its London listing occurred only a short period before the bursting of the credit bubble and so, despite a history of generating decent returns as a Frankfurt-listed company, its new UK shareholders barely had time to get to know it before its share price collapsed and its discount spiked outwards, along with the rest of the private equity sector.

It took some time for the private equity sector to regain investors’ trust but Princess was helped in this because it was one of the first funds to enhance its yield by paying dividends from capital. The slashing of interest rates in the wake of the credit crunch kick-started the manic search for income and, once it resumed dividend payments in 2010, Princess was one of the highest yielding funds in the investment companies sector. ….read more here