Private equity investment companies look even cheaper than normal. For 3i Group, that has translated into a rare discount of its shares compared with the FTSE 100 stalwart’s net asset value.
The share price declines across the sector have happened for a good reason: investors expect falls in the values of the private companies that these investment trusts hold. Companies such as 3i revalue their investments every three months, meaning that changes in the worth of their private market holdings can take longer to materialise than those of publicly quoted companies. But 3i’s impressive record of returns means the decline in the share price more than accounts for a hiatus or a potential reversal in the sharp rise in the value of the investment specialist’s
