SVG Capital Share Discussion Threads

[cerrito] 12/8/2012 13:12

The share price is a conundrum; on the one hand healthy discount to the 6.12 NAV of 393p; they are returning cash to shareholders and a reduction in uncalled commitments. Also a bit flabbergasted to read that in their MBO funds covering 81% of the total portfolio, average earnings increase of their portfolio companies was 35% and revenue increase of 27% in the first half. Seems too good to be true.
On the other continued macro headwinds and SVI's discount of share price to NAV not out of line with other PE Trusts.
In the second quarter the NAV declined from 407p to 393p. The Hugo Boss share price declined from about 87 at 3.12 to 78 at 6.12 and has declined to 76 now.The Galaxy share price declined from 18.8 approx at 3.12 to 17,5 at 6.12 but has now rebounded to 20.
Not quite sure why Hugo Boss share price has declined since June end given Valentino sale; also note that Hugo Boss represents 29% of the portfolio which is unhealthily large IMO; however as I do not have any direct equity exposure to this sector can take this in my stride; Galaxy's 15% portfolio weighting is a bit racy but as I do not have any other exposure in my portfolio to Chinese middle class consumers am OK with this.
To me it seems that the share price will continue to wander in the 260/290 range that it has in the last few months.

[cerrito] 18/5/2012 18:38

Interesting to see how much the share price falls with the amount of share buy backs that are taking place; this week just ended bought back 747k shares and in the 4 day week before that 650k shares.
Also need to follow news on how the sale of their/Permira's holding in Iglo where their 30.3.12 valuation was £114m.

[cerrito] 27/4/2012 14:25

Yesterday's news about Hugo Boss' strong first quarter made me check their share price for the first time for some time and see that it is about 85, in line with quarter end. Remember that in Q1, SVI's holding in Hugo Boss increased in value from 261 to 315Em.
Also interested to see that during April share price of the second largest share of SVI's portfolio Galaxy Entertainment has continued to increase and is now 23.3; the value of SVI's hoding in Galaxy went up from E120m to E175m in Q1.

[cerrito] 19/4/2012 23:44

Cracker of a first quarter so with NAV at 393p at March 30(and at 407p if one includes the Director's valuation of the Management Business) the shares are still at a good discount even with the buy backs and the tender offer....but salutary to read the cautious outlook statement.

[rambutan2] 20/3/2012 15:55

Yes it does.

That's a big chunk of votes against though, wonder where it will lead?

[jaws6] 20/3/2012 13:41

RNS out does that mean buyback go ahead at 321 as said before in RNS ?

First £50 million tender offer priced at 321.0p per share, a 10% discount to the adjusted December 2011 net asset value of 356.6p per share (excluding the 13.0p per share Directors' unaudited valuation of SVG Advisers and SVG Investment Managers and updated for the changes in the value of quoted holdings, fees, finance costs, foreign exchange and realisations to 28 February 2012)

[cerrito] 17/3/2012 23:18

From Today's Telegraph

SVG, one of the oldest listed private equity firms, is facing a bitter shareholder revolt that could spark a hostile battle for control at the FTSE 250 company.
Jeremy Coller, of Coller Capital and a 20.4pc shareholder in SVG, is thought to have held talks with Schroders about voting down the company's two key strategy proposals at next Tuesday's extraordinary general meeting.

Firstly, Coller is not happy that SVG intends to return just 15pc of the company's capital, rather than fulfilling a 2009 promise to allow shareholders who want a full exit to be able to get one through a share split and a partial wind-down of the company. Secondly, SVG wants to ditch its exclusive tie-up with private equity partner Permira.

This week SVG chairman Nicholas Ferguson surprised the market by stepping down, with insiders suggesting there was an entrenched feud with Mr Coller at the heart of the decision.

Mr Coller has already voted his stake against the two proposals. It is not clear if Schroders, which has 10.2pc of the shares, has made a final decision. David Lis, fund manager at Aviva which has a 3.8pc share, is supportive of the company, as is Aegon, which has 18pc and a board seat.

SVG chief executive Lynn Fordham says she will press on with the company's strategy because trying to give back more than the £170m currently proposed would create "significant execution risk". She told The Daily Telegraph: "I have lost sleep over this – the behaviour we are seeing is simply not logical.





"I am not looking for a fight, [but] I'm confident that when Tuesday comes we will win the vote."

However, insiders suggest Mr Coller is garnering support from other shareholders in the build-up to the meeting.

"It will be a close vote - but that does not speak well of the mandate the board have, even if they do win," said a source.

In the last three years SVG has had a torrid time, including a humiliating volte-face about its €2.4m (£2bn) commitment to Permira's 2008 fund. The financial crisis and the debt the trust had taken on led to a liquidity pinch at the firm that saw its payment powers frozen.

SVG could only afford €1.4bn of the money it had promised to Permira and was humbled into a deeply discounted rights issue and massive share placement. Enter Coller Capital.

At the same time, Ms Fordham was parachuted in to restructure the firm and save it from what some speculated was certain failure.

Since then she has overseen the rights issue and has spent millions buying back the firm's own debt and stregthening its balance sheet.

SVG's net asset per share rose 12.8pc to 337.1p in 2011 according to its preliminary results last week.

The strategy switch Ms Fordham is proposing means Permira – which also owns Bird's Eye and New Look – will almost certainly get no money from SVG for its current €6.5bn fund raising, though it could get investment from SVG in the future.

It will allow SVG to invest in a handful of other private equity firms, releasing it from having to cough up very big sums of money to meet just Permira's needs.

More firms mean smaller sums to each and therefore smaller capital calls for deal, which will help SVG protect its liquidity.

[cerrito] 10/3/2012 22:29

am going in for the tender for all my shares in case there are some who do not go in..there may be a few.

[jaws6] 15/2/2012 09:05

news out ?

[markie7] 10/2/2012 12:04

good results here with Singers increasing their target price today to 350

[cerrito] 09/2/2012 16:37

Comparing the situation at 31.12.and 30.6 interesting; in the second half total investments went down from £1501m to £1168m, due to decrease in valuations and sales. Indeed to show how 2011 was a year of two halves investment gains in the first semester were £264m and in the second semester were losses of £120m.

[cerrito] 09/2/2012 16:17

As you say gorilla 36, nice results.
Am kicking myself as I lightened up yesterday feeling that the market was a bit frothy. Watch carefully what CEO Fordham does as she is astute in buying SVI shares.
They are right to say that there are good opportunities to invest in private equity at the current time but probably got the balance right to return capital by share buy backs and note repurchases.
Given that the balance sheet is so much stronger be interesting to see how much the discount comes in.
Was half expecting to put out warm words about eventual dividend payments.
Interesting to see that they made no new primary commitments in 2011.
Note reduction in amount of uncalled commitments from £209m to £170m as well as the reduction in net debt of the underlying Permira companies.
We do of course need to note reduction in profits from £326m to £107m, largely due to investment gains decreasing from £351 in 2010(when of course they rebounded from 2009) to £138m.
What is good news is that as of today portfolio is worth more than at 31.12.11. Hugo Boss shares are up 22% odd YTD which means the valuation has gone up from £260m to £315m approx; Galaxy shares are today at HK$17.88 ie portfolio valuation has gone from £120 to £150m Freescale's shares have increased as well such that the valuation is now £60m+ rather than £48m. Pro Sieben Sat's shares have also gone up by 20% though have not calculated this as the holding in this company, even though listed, is valued by SVG on an earnings basis.
Would be good if someone could double check my figures which I have not adjusted for movements in FX rates against £ but the increase in valuation of just these three companies equates to an increase in NAV of 32p approx. Not getting too carried away; my maths may be wrong and I feel the market a bit toppy and hence my sale yesterday of SVI.
Last point I read in press late last year that Permira had sold shares in Hugo Boss and was thus expecting a sale here but seems to have been in Permira funds which SVI are not in.

[gorilla36] 09/2/2012 08:51

Nice results

[skyship] 20/12/2011 15:57

A happy Christmas present for SVI holders. Precisely the reason why I'm buying the sector (see the PE thread), but regretably I didn't buy SVI...

[cerrito] 09/11/2011 19:40

Been looking at IMS.
Did well to sell down Provimi and Galaxy in the boom mid year times; good that share price of their biggest investment Hugo Boss is holding steady and seems for now at least comfortable in the 60/65 range, albeit below late July peak of 75+ and Hugo Boss seem to look at the future with optimism.
Note cautious stance in the IMS and that quote We anticipate distributions from the portfolio to be slow until markets show signs of stabilisation unquote and so I guess we may need to wait a bit longer for dividends but of course they have been active buying back shares(since Sept 30 11 have bought back about 0.6% of their shares) and now their convertibles.
Happy to hold not sure if I will be adding but cannot see myself selling.

[cerrito] 04/11/2011 13:09

have to have a good look at yesterday's IMS but this from Today's FT causght me eye as Pro Sieben is one of their bigger holds


ITV was the biggest blue-chip gainer on Thursday in a fidgety London market on hopes that a trading update would impress.

The broadcaster added 5.9 per cent to 65p after German peer ProSiebenSat. 1 beat forecasts and said advertising demand showed no signs of deteriorating.

[cerrito] 22/9/2011 15:56

When I saw rns on holdings in company I assumed that someone was exiting and thus could explain the share price weakness which has surprised me given that the price took the august volatility pretty well. This is especially as Hugo Boss shares have in fact strengthened over the last month.
I see that Legal and General have increased their holding.
Had a run through the risk factors section of the notes to the interims to see if there were any time bombs.
Could not find any though it is disappointing that no information given on aggregate gearing for the underlying investments and I did note that the 10% of the portfolio represented by private equity fund of funds did have a strong H1 2011 given the beneficial impact of the leverage which will no doubt bite them in this half.
Checked to see FX exposure;10.4% of total assets are in £ and 64% in Euro...they have Euro borrowings and what I did not understand is that we are told that overall a 10% deval of sterling (against I assume a basket of currencies) would produce a 10.1 appreciation in shareholder's fund and a 10% reval a 10.1% decline.
Seems time coming to increase investment

[cerrito] 07/9/2011 15:11

I have to say that given that the Galaxy price was 20+ for quite a bit of late July/early August I had hoped that SVI would get a better price but in this market I guess cash is king
Here is an FT article on it dated Sept 2
2 2011 FT
Overall with Galaxy and on the basis that Provimi goes through SVI will have realized £187m in cash which if used for debt repayment would pay off a large part of the total debt at 30.6.11 of £320m.
It was also good that they were able to realize 12/13% of their total assets in line with June 30 valuation.
As of today the Hugo Boss valuation has fallen 11% odd since June 30 or roughly £28m or about 8p per share but even with today's increased share price of 260p there is a big disconnect with the June 393p NAV.

[cerrito] 16/8/2011 08:12

Share price delicately poised.
On the one hand the current macro climate not propitious for p/e companies, even though in SVG's case they have reduced their own debt.
On the other hand some really good bull points
To be able to sell at book value your 5th largest holding when the shareprice is at a 35% discount to the June 30 NAV is good stuff.
Also note that CEO Fordham bought a reasonable amount of shares last week just after the interims were announced is good news.
Also note that the share price of Galaxy- the second largest holding- is at 20.40, lower I know than last week's 22.15 but higher than June 30 17.50 share price
Share price of largest holding Hugo Boss closed August 15 a tad higher than June 30.
They stated in their interims that when they get to a net cash position they will look at returning cash to the shareholders; need to recognize this is even after this deal some way away; at June 30 11 cash was £15m and debt £320m.

[sameerbhai1971] 08/7/2011 23:26

Thanks Cerrito. It seems that the share prices of Hugo Boss (€69)and Galaxy HK$17.50 have continued to rise since your posting. Arysta is difficult to find information. TDC, Freescale and Prosieben share prices have also recovered. TDC should be out of lock up for Permira now, so they could sell at any time. Also press seems to suggest that All 3 Media and Provimi are currently being sold by Permira through an auction process.
There is around £280m in debt left. If we assume Provimi and All 3 Media are sold at NAV (total £130m), the TDC shares are sold (say £70m). That could mean less than £80m debt by the end of the year. This would mean the capital structure would be secure and lead to the narrowing of the discount to NAV?

[cerrito] 21/5/2011 21:32

Interesting article- and seems evenly balanced - on the industry forces around Galaxy the 2nd largest of SVI's investments.

See that Galaxy's shares at 14.5 continue to increase.

I also seen from the April 28 announcement on Hugo Boss- the largest SVI investment- that they had a very good first quarter


Incidentally cannot get any financial info on the third largest investment Arysta Life Science.
The 4th largest investment is Provimi who have not issued a first quarter trading statement but whose 2010 figures which at first glance seem to have been good can be found at

[cerrito] 10/4/2011 23:13

All 3 Media is SVI's 12th largest investment worth £18m at 311210