SVG predicts more deals as private equity picks up pace

 

The private equity market has seen a sharp upturn in deals this year, according to SVG Capital, the listed company that is one of the main investors in the sector alongside the likes of Permira and Cinven.

“There are definitely more deals going on out there,” its chief executive, Lynn Fordham, said. “It has quietened down since July but that’s just the holiday factor, with more to come.”

SVG benefited from the increasing activity, cashing in shares in the fashion group Hugo Boss and the AA owner Acromas to raise a total of £209m. But at the same time it has increased its spending, with an outlay of almost £150m on 14 new investments.

Ms Fordham said: “We are net divestors and I am happy with that. Prices and leverage have been improving, which means we have been divesting on quite high multiples and investing on lower ones.”

She said there was particularly strong activity in the healthcare, telecoms, technology and media sectors. “We are generally involved in larger buyouts and are seeing a mixture of trade sales, carve-outs from bigger businesses and some private equity flips.”

SVG has now taken itself from being a co-investor purely alongside Permira to join in with Cinven, CDR  and, most recently, CCMP, which specialises in mid-cap and growth investments in North America and Europe.

Over the past five years SVG’s value has risen by  213 per cent. In the first six months of the year, net asset value climbed 4 per cent to 525p a share, although total returns were down 6.9 per cent as the portfolio was hit by the strength of the pound against some of its European investments.

Ms Fordham said: “We remain positive about the long-term outlook for private equity, albeit we are cautious about pricing and leverage levels in certain areas of the market currently.”

She said that newer investments – those made in the aftermath of a shareholder revolt in 2012 – were a growing part of the group’s portfolio. SVG has net cash and intends to return a further £100m to shareholders.

SVG shares rose 5.9p to 427.3p. That is still a 19 per cent discount to net asset value, which James Glass, an analyst at the broker Numis, believes is too great. He said: “I see this as too wide given the greater visibility of the portfolio under the new strategy, the continued returns of capital, and current portfolio growth prospects.”

During the six months the best-performing investments were SVG’s five largest holdings, which together represent 57 per cent of its total assets. The star was the semi-conductor maker Freescale, which gained £24.5m in value largely thanks to its successful flotation in the US. Hugo Boss continued its growth and gained £9.2m in value.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Contracts Executive - City of London

£35000 - £37000 per annum + benefits: Ashdown Group: Contracts Executive - Cit...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree Group have been well esta...

Recruitment Genius: Call Centre Debt Collector - Multiple Roles

£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Guru Careers: Financial Director / FD / Senior Finance Manager

Up to 70k DOE: Guru Careers: We are seeking an experienced Financial Director ...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen