Bellevue Asset Management is considering launching a new investment trust focused on private equities, according to fund manager Paul Major.
The manager of the Bellevue Healthcare Trust said: “There are some interesting opportunities in private markets and we would love to launch a product to do that.”
Major said he currently looks across the entire healthcare sector anyway, spending 20% to 30% of his time researching private equities despite not owning unlisted companies in his trust.
“We cannot invest in them, but we want to know how the markets will look five to 10 years from now. That means we have to look at the potential disruptors and can't just limit ourselves to the public domain,” he said.
However, he excludes private equities from Bellevue Healthcare Trust as he does not want to mix public and private assets in the same fund. He referred to the Woodford Equity Income fund as an example of when mixing both asset classes can go wrong.
“People need to know the liquidity profile of what they invest in, what the net asset value (NAV), risk and uncertainties are. Then they can decide how much they want to allocate to these different things,” he said.
As such, Major said any investment into private equity would have to be through “a separate product.” If so, this would be Bellevue’s second trust after the launch of Bellevue Healthcare Trust in 2016.
Performance of trust vs sector since launch
Source: FE Analytics
The investment company has made 79.19% since its launch in 2016, a top quartile performance in the IT Biotechnology & Healthcare sector.
Although the launch of a private equity fund is an option, Major added that the priority remains the existing investment products.
Private assets were an important part of the Mansion House reforms announced by Jeremy Hunt this week, which included encouraging pension funds to invest in unlisted and earlier-stage UK growth businesses,
The chancellor announced a range of measures, including a voluntary agreement with nine major providers of defined contribution pension schemes to target an allocation of 5% of their default funds into unlisted businesses by 2030.
Hunt claimed that this could “increase a typical earner’s pension by 12% of over the course of a career”.
However, Tom Selby, head of retirement at AJ Bell warned that this claim should be taken with a dose of scepticism.
He said: “It is, of course, possible that an investment approach that embraces a bit more risk over the long-term will ultimately boost member returns – but there are absolutely no guarantees.
“As such, the chancellor’s claim that this new approach will boost the average pension pot by 12%, or £1,000 a year, when they reach retirement should be treated with a huge handful of salt.”