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Truth is the daughter of time
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Truth is the daughter of time

Your April edition of Sensible Investments with Dr John

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John Wolstencroft
Apr 11, 2023
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Truth is the daughter of time
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Richard III being accused of murdering his nephews, a scene from Shakespeare’s play…Or The market accusing Private Equity Managers of overvaluing their holdings? (National Gallery London)

My mother loved historical fiction. Her favourite is The Daughter of Time, a fantastic novel by Josephine Tey, in which a bed-bound detective discovers that King Richard III did not murder his nephews. This was in fact a rumour fabricated by his enemies. And yet most believed he was responsible for the boys’ deaths. In the novel we learn that the academics already knew this, but decided collectively that it was simpler to allow the masses to continue on in ignorance of the truth. 

So, what has this got to do with Private Equity?

At the moment the private equity trusts in the UK are very much in the doldrums. The carrying value (NAV - Net Asset Value) of their underlying private investments (shares in companies not listed on any stock market) is much, much higher than the share price of the trust. 

The discount in some cases is almost 50%. That means the underlying investments are valued at twice the share price.

When will truth out? And what is the truth?

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A guest post by
John Wolstencroft
Investor and former business owner.
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