Once reserved for institutions and the ultra-wealthy, private equity is now part of the mainstream investment landscape. Hamish Mair, Fund Manager of CT Private Equity Trust, explores why the asset class is increasingly recognised as a key portfolio component and why today’s market presents an appealing entry point for investors.
A high-return, high-impact asset class
“Private equity gives investors access to opportunities that are often hidden from public markets,” says Mair. “These are companies that might be early in their growth journey, highly specialised, or operating in niche areas that are not well represented among listed stocks. That’s where the potential for strong, long-term value creation lies.”
Over the past decade, European private equity has delivered annualised returns of 7.7% above public market equivalents, demonstrating its ability to consistently outperform listed equities. While private equity is higher risk by nature, due to illiquidity and leverage, investors are typically rewarded with returns in the high teens or above over full cycles.
“Private equity is about more than financial engineering,” Mair adds. “It’s a highly constructive form of capitalism where investors and management teams work together to grow businesses, create jobs, and build real economic value. That alignment of interests is one of the key reasons private equity has been such a powerful force for long-term wealth creation.”
Diversification beyond public markets
The structural shift towards companies staying private for longer has created a vast and expanding investment universe. Many successful businesses now grow and mature outside public markets before being acquired, merged or listed, providing private equity investors with a unique window into value creation.
“Private equity gives access to entire segments of the economy that simply don’t exist on the stock exchange,” says Mair. “That diversification is valuable in its own right, especially at a time when public market indices are increasingly concentrated in a small number of mega-cap names.”
Balancing risk through listed private equity
Despite its attractions, private equity investing isn’t without challenges. Long lock-up periods, high entry thresholds and limited transparency have historically deterred individual investors. But Mair points out that listed investment trusts such as CT Private Equity Trust offer a practical solution.
“By investing through a diversified, publicly listed vehicle, investors can access private equity returns with daily liquidity, independent oversight and transparent pricing,” he explains. “Our portfolio spans more than 100 underlying investments across sectors, stages and geographies, which helps moderate risk without diluting performance potential.”
Notably, many listed private equity trusts are currently trading at significant discounts to NAV – offering what Mair describes as “a double discount opportunity.”
“Investors benefit both from conservatively valued portfolios and from market pricing that doesn’t fully reflect the underlying progress of the companies we own,” he notes. “That creates an attractive entry point for long-term investors looking for growth, income and diversification.”
A growing role in modern portfolios
Institutional investors have long recognised private equity’s role in boosting portfolio returns and resilience, with average allocations of around 7-8%. Increasingly, private investors are following suit through accessible vehicles like CT Private Equity Trust.
“Private equity isn’t a get-rich-quick scheme,” Mair concludes. “It’s a long-term, value-driven approach that rewards patience and selectivity. When done well, with diversification, discipline and strong governance, it’s one of the most rewarding and constructive forms of investment available.”
