A number of investment trusts are still trading at discounts exceeding 20%, offering potentially attractive opportunities if sentiment improves. After several difficult years for the investment trust sector, discounts have begun to narrow.
The average UK investment trust now trades on a 9.6% discount to net asset value (NAV), the narrowest level since 2022, helped by lower interest rate expectations, mergers, buybacks and activist pressure. However,
| Investment trust | Approx. NAV discount | AIC sector average | Dividend yield |
| HarbourVest Global Private Equity | ~22.5% | Private Equity ~26% | Nil |
| Pantheon International | ~25%* | Private Equity ~26% | Nil |
| Chrysalis Investments | ~44%** | Growth Capital ~+13.8% | Nil |
All share prices 9 July 2026. *NAV 31 May 2026. **NAV at 31 March 2026.
Why are discounts still so wide?
The deepest discounts tend to reflect one or more of the following:
- Unlisted or difficult-to-value assets.
- Higher interest rates reducing demand for alternatives.
- Weak recent performance.
- Limited liquidity.
- Investor concerns over governance or portfolio valuations.
- Lack of natural buyers.
Discounts can remain wide for years, but can also narrow rapidly following buybacks, asset sales, improved performance or takeover activity.
The cheapest and most expensive investment trust sectors relative to their own history – Trustnet
HarbourVest Global Private Equity (LON:HVPE)
Objective: Global private equity exposure through buyout, venture capital and secondary funds.
Manager: HarbourVest Partners.
The portfolio owns interests in thousands of private companies across technology, healthcare, industrials and consumer businesses. The exceptionally wide discount reflects investor caution towards private assets and uncertainty over valuations.
Income: Low yield as returns are focused on long-term capital growth.
Best suited to: Investors with a 10-year-plus investment horizon seeking diversified private equity exposure.
Discount narrowing catalysts
- Lower interest rates
- Increased private equity deal activity
- Share buybacks
- Realisations above carrying values
Pantheon International (LON:PIN)
Objective: Long-term capital growth through global private equity.
Manager: Pantheon.
The trust combines buyouts, growth equity and infrastructure investments across North America, Europe and Asia. Despite a strong long-term record, private equity remains out of favour.
Income: Progressive but modest dividend.
Best suited to: Growth investors wanting diversified exposure beyond listed equities.
Discount narrowing catalysts
- Strong exits
- Improved NAV growth
- Continued buybacks
- Better sentiment towards alternatives
Chrysalis Investments (LON:CHRY)
Objective: Invest in fast-growing private technology companies before IPO.
Manager: Jupiter Asset Management.
Major holdings include late-stage fintech, software and digital businesses, including Starling Bank, Klarna and Smart Pension. The lack of public market pricing means investors remain cautious over valuations, explaining one of the widest discounts in the market.
Income: None.
Best suited to: Higher-risk growth investors comfortable with volatility.
Discount narrowing catalysts
- IPOs
- Trade sales
- Portfolio revaluations
- Improved technology sentiment
What could narrow discounts?
The current environment is considerably more supportive than in 2023–2025.
Potential catalysts include:
- Falling UK interest rates.
- Continued share buybacks.
- Mergers and acquisitions.
- Improved investment performance.
- Better regulation around investment trust disclosures.
- Increased retail investor demand.
The AIC notes that industry-wide discounts have already narrowed materially over recent months following restructuring across the sector.
Investor verdict
Wide discounts alone are not a reason to invest. Some trusts deserve to trade cheaply because of structural issues or uncertain asset valuations. However, for patient investors, today’s discounts provide an opportunity to buy diversified portfolios of assets at materially less than their underlying value.
Among the trusts above:
- Best value: Pantheon International combines a high-quality private equity portfolio with a strong long-term record and meaningful potential for discount narrowing.
- Highest growth potential: HarbourVest Global Private Equity, albeit with greater valuation uncertainty.
- Highest risk/highest reward: Chrysalis Investments, where successful portfolio exits could significantly boost NAV.
For long-term retail investors willing to tolerate periods of volatility, selected investment trusts trading at unusually wide discounts may offer a rare opportunity to benefit from both underlying portfolio growth and a narrowing of the discount over time.
However, they come with considerable risks, not least that discounts fail to narrow, but could conceivably widen. All require a supportive IPO market which has been weak for the past few, although SpaceX’s (NASDAQ:SPCX) recent spectacular listing could provide a catalyst for greater IPO appetite, but it’s a big if.
SpaceX: Does a $2.1 trillion valuation make sense?
The currently wide discounts of our featured trusts suggests that while retail investors are becoming more interested in private equity space, not all trusts are thus far reaping the rewards.
Pantheon, HarbourVest Global and Chrysalis are among a number of trusts still trading at discounts exceeding 20%, and whether that changes in future remains the $64 million question.
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