The recent boom in private equity activity has seen managers target companies at the larger end of the spectrum, leaving plenty of opportunities at the smaller end of the market, say the managers of the Literacy Capital Investment Trust.
In the latest Portfolio Adviser video interview, Literacy Capital co-founders, father and son duo Paul and Richard Pindar, say there is currently a large volume of money ready to be invested in private equity but that means a lot of managers are only looking at bigger businesses.
Chief executive Richard Pindar says: “We think there is a real opportunity there where that [smaller] market is less well served because lots of managers have moved towards and focused on bigger businesses.”
In addition, he says these smaller businesses have often not had external shareholders and are relatively thin in terms of management teams and experience, so bringing in external expertise can help transform those businesses.
Charitable objective
Literacy Capital is a closed-end investment company focused on investing in and supporting UK businesses. It is unique in that it is the only investment fund of our type to have been set up with a charitable objective.
The Pindar family has a significant family interest in the subject of literacy, a particular issue in the UK which has the worst level of childhood literacy than any country in the OECD – 200,000 children a year leave primary school not being able to read to a decent standard.
Paul Pindar says every year the trust donates 0.9% of assets to literacy charities in the UK, but he emphasises its “first and foremost” priority is to build value for shareholders and investors.
“We are very serious about building the assets but equally, if we can do that alongside something that has a high social benefit then we love to do so.”
Paul Pindar, who is a founder of Capita, also talks about how his experience at the FTSE 100 firm benefits the investment trust.
Watch the interview above for more.
