Tuesday, August 12, 2008

Lehman Brothers Private Equity

Lehman Brothers Private Equity is a closed end fund trading on the Amsterdam/Euronext exchange. It's only a year old. As the chart above shows the NAV has increased since inception in a period of very volatile markets though about half the fund has been allocated to investments since the IPO, which will have smoothed returns. The share price has been all over the place but now is trading at a very substantial discount to NAV. The firm mainly invests in private equity funds. 64% of those funds are managed by managers whose previous funds were in the top quartile of returns. A smaller portion of the fund consists of direct "co-investments" in companies alongside private equity funds. 75% of the firms investments are in North America, 22% in Europe, and 3% in Asia. The majority of investments are of the buyout variety, with smaller amounts allocated to "special situations" and venture capital. There is no debt at the fund level. The firm has an unused credit facility.

I tried to trade it in my Interactive Brokers simulation account but got the message that there is no such ticker symbol and it isn't included in IB's product listing either. So I've sent a "trouble ticket" to IB and e-mailed the company to see if it can be included.

The firm is listed in Amsterdam, I suppose because it is an investment fund that charges a performance fee. The SEC forbids charging performance fees to non-qualified investors. Other governments (including Australia's too) aren't worried about this.


I already got a response from the company. They contacted IB and IB told them that the request for a new listing has to come from a client. This morning I added a request for BPLE.L to my so far unprocessed ticket.

No comments: