CANDOVER Investment’s decision to spin off its private equity arm provides some much-needed clarity for investors, who have long bemoaned the existing set-up.
It is not hard to see why. All private equity firms have struggled in the post-financial crisis world, as evidenced by their notable absence from the M&A activity.
However, Candover’s complex structure – with a listed parent that co-invests alongside an independent but wholly-owned fund manager, Candover Partners, over which it has no say – perturbed investors. Most couldn’t even explain the arrangement in a single breath, let alone trust it.
Now the uncertainty over the firm’s structure has been partially put to rest, the firm has relatively better prospects, despite having essentially given up by going into “realisation” mode and returning cash to clients.
However, the firm still has too many eggs in the one basket, with a highly concentrated portfolio (Expro International represents 44 per cent of assets).
For those investors wanting to take a punt in the listed private equity space, there are better options, such as SVG Capital and Conversus Capital.