BMO Private Equity Trust (BPET) offers investors a distinctive approach as a private equity fund of funds. Listed private equity trust NAVs have considerably outperformed the FTSE All Share and the Numis Smaller Companies Index over the past five and ten years. BPET aims to provide access to private equity’s strong returns, whilst also managing the risks by deliberately diversifying. Consequently BPET has c. 100 investments, in funds and co-investments, that are managed by around 50 underlying managers, providing exposure to approximately 450 underlying companies. BPET differentiates itself to peers by its exposure to managers at a relatively early stage in their development. BPET’s manager believes this means investors are exposed to more motivated teams and, in terms of underlying company, to lower mid-market deals where BMO are more likely to be offered co-investment opportunities, as discussed under the Portfolio section. Co-investments are another differentiator, representing c. 43% of the portfolio – the average over the past ten years is 23%. As discussed in the Gearing section, the managers believe that BPET’s diversified portfolio suits gearing; which complements the over commitment strategy which blunts the effect of cash drag. Consequently, on a net debt to NAV basis, gearing is 23.6% which is amongst the higher of the LPE trusts. BPET aims to pay quarterly dividends, equivalent to an annual yield of 4% of the average of quarterly NAVs published over the preceding 12 months. However if this figure implies no growth in the dividend, the dividend payable will be equal to the previous dividend. This means that investors have some visibility on the current and future potential dividends. The current yield on the share price is 5.0%.