For some comparison, over the same period the average fund in the IT UK All Companies sector has added 34%. That’s a performance gap of 55%!

Today, I’m going to look at the firm’s performance over the past three years and explain why the shares have lagged peers. I’ll also be looking at a trust that I believe could be a better buy. 

Long term investing 

When Neil Woodford launched Patient Capital, he did so as a protest against the rest of the investment industry, which he believes is too short-termist. Patient Capital was founded to invest with a long term outlook and not be constrained by the City’s performance obsession. 

Three years on from launch, Neil Woodford believes it’s still too early to judge the trust’s performance record. In a recent meeting with City analysts, he declared: “I could not be more confident that we will deliver on what we said three years ago when we launched Patient Capital. There has been quite a lot of commentary and the focus of that has been misjudged. We said we would deliver over a three to five-year period and we have only just got to the three-year point.“

The problem is, Patient Capital’s short life has been dominated by high profile failures. Its most significant holding, shares in American biotech firm Prothena (at one point Woodford owned a third of the company), slumped 70% in April after it decided to discontinue the development of its lead drug. Shares in Allied Minds have also fallen following the writedown and disposal of its subsidiaries. These failures have eclipsed the smaller successes the trust has been able to achieve. 

As Patient Capital’s record shows, investing in early-stage companies is a tricky business. It’s virtually impossible to tell which businesses will succeed and which will fail.

This is why I’d avoid Woodford’s offering. Even though the star fund manager is confident in his stock picking abilities, I’d rather own an investment trust that holds already established businesses. EP Global Opportunities (LSE: EPG) is the perfect example. 

Global value 

The investment team at EP is on the lookout for undervalued investment opportunities around the world. The trust’s investment universe isn’t restricted. It can, and does, invest across the globe, giving investors exposure to economies they wouldn’t usually consider. 

Today, around 18% of net assets are invested in Japanese equities and 14% in the United States. Pharmaceutical giant Roche is the largest holding and healthcare is the most substantial sector exposure (18%). 

EP is globally diversified but what about its performance record? Well, since its inception (15 December 2003) EP’s net asset value per share has jumped 330% — including reinvestment of dividends. This performance track record, coupled with EP’s global equity exposure and exposure to the pharmaceutical sector, is enough to convince me that it’s a better buy than Patient Capital trust. 

My view is that, over the long term, EP will provide better, more consistent returns for investors without the additional risk of investing in start-up businesses.

It seems to me as if EP Global’s stock has come under pressure thanks to the market turbulence around the world. Net asset value at the end of last week was 324p per share, down from the 345p per share in mid-January, but the stock is still trading a discount of 8.3% to this underlying value.

Global investment exposure 

As mentioned above, EP has a global investment mandate, something its managers are currently making the most of. The most substantial holding in the portfolio as a percentage of net assets is pharmaceutical group Roche, closely followed by AstraZeneca. Together, these two companies account for 6.6% of net assets. 

Other top holdings also include Chinese consumer goods group Goodbaby International and Japanse financial conglomerate Sumitomo Mitsui Trust. BP is the fifth largest holding at 2.8% of net assets.

So, if you are looking for a globally diversified investment trust that has a record of producing market-beating returns for investors, and has exposure to the fast-growing healthcare market, EP Global could be an excellent buy for your portfolio. The management fee is 1% per annum, and the trust supports a yield of 1.3%.

High risk, high reward 

If you’re looking for a more specialist fund, Draper Esprit (LSE: GROW) should not be overlooked. This company is a leading venture capital business, which invests in high growth digital technology startups. 

The company has a track record of achieving 20% per annum returns on its investment portfolio, and management is committed to maintaining this record. According to a trading update issued by the group today, the fair value of the portfolio grew by 66% for the year to the end of March 2018, a staggering return on investment. For the period, the company realised £15m of investments via successful exits and redeployed £75m back into the portfolio.

However, while the returns on offer from Draper might look attractive, I should point out that private equity investing in early-stage tech companies is a risky business, and there’s no guarantee that the firm will continue to generate the 20% per annum returns that it has done in the past.

That being said, management has already more than proven itself and is committed to investing with a long-term horizon, rather than seeking short-term gains. 

With this being the case, I believe Draper could be a great addition to your portfolio to add a layer of diversification. Many studies have shown that small companies generate the best returns, but investing in the space can be complicated and risky for the average investor. So it might be best to let Draper do the hard work for you, sit back and relax. 

What’s more, unlike many other funds, investment trusts are not limited in the assets they can hold, which allows managers to seek out the best ones to buy all over the world. And some investment trusts have been around for 100 years or more, so they have a lengthy record for investors to consider before buying.

A global outlook

EP Global Opportunities Trust (LSE: EPG) is UK-listed with a worldwide mandate. Since inception in December 2003, it has achieved a compound annual return for investors of just under 10.1% by investing globally in undervalued securities. 

EP Global’s broad investment mandate allows it to invest where many other funds would be afraid to tread. For example, of its top 10 holdings, only three are UK based (four including Royal Dutch Shell, although EP owns the A shares which are domiciled in the Netherlands). Non-UK holdings include pharmaceutical giant Novartis (Switzerland), Bank Mandiri (Indonesia), Commerzbank (Germany) and Shanghai Fosun Pharmaceutical (China). Together, the top 10 holdings account for just under 30% of assets and provide a great play on global growth trends. 

The net asset value of EP Global is 345p per share at the time of writing, so today the shares are trading at a discount of around 5%. As well as this discount, the shares offer a yield of 1.3%. The management fee is 1% per annum. 

Overall, if you’re looking for a play on global growth that’s got a track record of double-digit returns behind it, EP Global seems to me to be the perfect buy. 

Private equity profits 

Another trust I like the look of is ICG Enterprise Trust (LSE: ICGT). ICG is a private equity business, so its business model varies significantly from that of EP Global, but that hasn’t stopped the company from beating the market. 

During the past decade, shares in the fund have returned 123.9%, excluding dividends, compared to the FTSE All-Share Index return of 78.4%. 

According to the investment company’s results for the three months to the end of October, which were published today, it produced a total return of 9.1% for investors over the nine months to the end of the period, thanks to some key disposals and cash returns. Management is targeting a 20p per share dividend for the end of the year, as well as a share buyback. 

As it sells down some investments into a seller’s market, ICG is re-investing some of its proceeds into new opportunities such as the co-investment of £8.1m in Visma, provider of accounting software and business outsourcing services, alongside peer fund ICG Europe VI. 

So all in all, if you’re looking for a trust that’s got a record of beating the market by investing in unquoted securities, that’s also returning funds to investors, IGC ticks all the boxes.