SVG Capital Share Discussion Threads

[atholl91] 15/9/2016 11:33

Cerrito, I calculate +£87m in currency movements since 30/4 should take NAV to 720p - modest revaluation of investments could take it to say 750p. Any chance of a counter bid to 710 or so?

[atholl91] 13/9/2016 21:04

I was on the board of a large Inv Trust for a dozen years and when the disc went over 10% we started on buy-backs as the manager feared predators with the loss of management contacts, broker rebates, etc. PE trusts do have liquidity issues but we shareholders should be vocal at AGM's about +20% discounts. Directors don't like being told they are not doing their jobs properly when the press are present. One can borrow long term money at rates I have not seen in my 43 yrs in business so no excuses.

[cerrito] 12/9/2016 17:08

your last sentence rambutan2 was relevant-remember that in the last AGM there were 32/37% of the votes against CEO, Chairman and Remuneration Report which to me suggests there will be little read across for other pe shares.

[luckymouse] 12/9/2016 11:34

didn't see that coming lol - well done holders :)

[rambutan2] 12/9/2016 11:04

Nice start to the week. Am not totally surprised at Harbourvest move as they have made good money out of two previous take privates in recent years, Conversus and ????. SVI is perfect for them with its clean structure, net cash, big chunk of nav in fof in early run off so delivering cash, with rest in a few big quality mainly US based funds with which Harbourvest will probably already have relationships with. Coller get out and get revenge!

[cerrito] 12/9/2016 10:33

One assumes that Coller with 26% of the shares are signed up. There must be some doubters as no doubt all shareholders with above 3% were approached and as at 22.3.16 just over 60% of the shares were held by holders with 3%+.
It is now the time for the Chairman to justify the-to me-exorbitant £130k fee pa he collects.
Remember that the 30.4.16 NAV of 666p will go up given the currency composition of the assets. Of the £1,094m of financial assets at 31.1.16, £130m were in £, £334m in Euro and £596m in US$. They had no FX liabilities.
Sold about 20% of my holding this morning and will see what happens

[atholl91] 12/9/2016 08:24

Good news. All the Managers of PE trusts on more than 10% discounts should start worrying about their fees and start reducing discounts.

[mad foetus] 12/9/2016 08:00

I agree about the whole sector and if something as big as SVI is in play then presumably everything will be up for grabs. The key question for me is the board response: if they were to carry out an orderly disposal could they get materially better than 650p in an acceptable timeframe? What would you say are the next likely candidates for a buy-out? It could be that this whole sector may go from being listed to entirely institutional, which would be a loss, I feel.

[skyship] 12/9/2016 07:30

MF - A very pleasant start to the week for you. Certainly a shot in the arm for the whole sector I would have thought; but can't see any defence against a cash offer at a 15% premium!

[mad foetus] 12/9/2016 07:10

Well, a takeover offer at 650p! Given this is one of my biggest holdings, a 15% immediate uplift is good news, but it is still going for a sizeable discount. Interesting to see how the board plays this.

[mad foetus] 18/5/2016 13:26

bought into this a few weeks ago - the price action since has been positive and consistent, helped no doubt by the company buying back 40,000 shares 2 or 3 times a week. Assuming the discount is somewhere in the region of £1 a share (and it is significantly more), that will add at least £5m to the NAV each year, as well as putting a floor under the price. Well worth doing.

IMS due on 26 May, now could be a good time to buy imo

[rambutan2] 28/3/2016 02:29

Great use of money imho. If, as happened on 9/03, they can spend £2.3m to buy £3.5m of nav, thus giving shareholders a £1.2m uplift, I'm all for it. No, i'm not in favour of occasional/one off buybacks made to help out instit holders, but that's not what PIN has been doing.

[skyship] 27/3/2016 18:20

Hmm - total waste of money IMO. Just helps a few institutions to exit. Let them sell in the Market and use that cash to put PIN on a 5% yield - provide the benefit to all shareholders wanting to hold; not just to a few wanting to sell.

[rambutan2] 27/3/2016 17:39

To be fair to PIN, they have bought back plenty of shares in mkt at good discounts over last few years. The only peit to do so apart from SVI. Been nicely value accretive to shareholders.

"PIP began buying back shares in August 2011 and has so far invested £87.6m in buying back 13.7% of the Company's shares."

[skyship] 27/3/2016 09:07

Cerrito - totally agree with that comment re PIN. It's a great long-term performing PE Trust - but IMO it should be declaring a dividend, say 3% of NAV/annum. Increasingly the Trusts are recognising shareholder need for Income; but they shouldn't have to be pushed. Makes one think that they are really more interested in their fees than shareholder rights!

Also agree re the transparency of the debt funds. I like them, but do find them rather opaque. One has to take a fair bit on trust. Best Buys? For me NBDG & VTA. The latter's Interim Statement last week makes really good reading. A covered 10.3% yield + a 20% NAV discount suggests they should be higher than the current E6.00...

[cerrito] 26/3/2016 23:31

Thanks eeza for pointing out and correcting my snafu
Thanks Skyship for pointing out that there are bigger discounts than the 2 I have shares in FPEO and SVI. I got into FPEO as I had some of their zeros and into SVI in 2009 just after they did their rescue financing and may be that I have lacked curiosity.
I had a quick look at PIN and see it is diversified, has had a net positive cash flow from investments in the last three semesters and unleveraged but as far as I can see has no shareholder return programme; my question is we have had RECI and FAIR trading at a premium last year and people wondering why VTA has a 20% discount and yet to me these three are far less transparent than the PE companies

[skyship] 26/3/2016 09:41

Between the 16th & the 24th the Company has declared 5 BuyBack transactions totalling 260k shares at 494p average for a total cost of just under £1.3m. They would appear to be the only buyer in town.

Discounts have widened out across the sector. The average in Dec was just under 21%; now 28%. At just over 500p the shares are trading at a 23% NAV discount. As with FPEO, which I also commented upon this morning, these look over-valued; especially when you consider the value emerging elsewhere, as per these discounts: APEF @ 34.5%, NBPE @ 24.5%, PIN @ 30%, SEP @ 35%.

[eeza] 26/3/2016 09:35

"• SVI is shrinking:in April 2012 there were 294m shares outstanding; at 12.14 192m and at 12.15 67m."

Accounts state 159.978980m shares at 31/12/15. They also have 71.392872m shares in Treasury.

[cerrito] 25/3/2016 21:12

Having gone through the Prelims released a couple of days back, do not understand why this Trust continues to trade at a discount of approx. 23% to NAV; I could understand that discount some years back when it had a very concentrated portfolio,high gearing and no shareholder return mechanism. Now we have total borrowings of less than 4% of Net Worth; net cash 25% of Net Worth; an active shareholder return programme, a more diversified portfolio and commitment coverage of 1.6x. Tempted to increase my holding but not clear to me what will make the discount narrow significantly in the near term.
Some things that caught my eye
• Still have some concentration ie Freeserve 10% and Arysta 7%(both of which they state at least twice they are in the process of exiting), but of course much lower than in previous years.
• SVI is shrinking:in April 2012 there were 294m shares outstanding; at 12.14 192m and at 12.15 67m. Total assets have of course gone down because of this(and reduction in gearing) ie June 2013 was £1.46b and at 1.16 was £1.052b.
• Good to see post 2012 investments doing so well-a 19% total return.

[rambutan2] 25/3/2016 01:51

Good set of results this week:

[cerrito] 27/11/2015 12:38

I see prospect of a £50m tender offer and more active buy backs has pushed price up despite a flat NAV in the quarter to 31.10.
Main downer on the NAV was Freescale which at the half year represented at £154m 14% of the total assets. The share price in the quarter fell from US 39.87 to US33.49.
Good news is that Frescale share price up 10% odd today compared to end of October but still down 13%odd from end of July.
Nice to see reversal of FX loss.
Seems alot of work to have a tender offer of just £50m-even smaller than the April 2015 one of £70m
Still seem undervalued to me even after this morning's rise.

[cerrito] 30/9/2015 17:02

Thanks Skyship
I could understand why SVI was ar a big discount 4/5 years ago given its then financial position but not now
Will take a look at JPEL

[skyship] 30/9/2015 16:38

Cerrito - I track 17 PE Trusts on my spreadsheet. The average NAV discount after dropping out the highest (CDI) and the lowest (NRI) is 21.9%. SVI at 23.1% is therefore pretty much alongside its peers; though I do believe it usually trades at a lower discount than the others.

IMO the best two BUYs are currently:

# LMS @ 74.5p. The next Tender will be announced shortly and is expected to be c30% @ c92p. On the announcement the shares should move ahead to somewhere in the 77p-80p range.

# JPEL @ 94.0c. Having drifted back on profit-taking from their recent peak at 105.5c, the shares are again very good value due to the new Discount Management System coming into play next year. JPEL is now at a 26% discount. They aren't joining the select liquidation plays; but are going part way through their "Realisation Strategy" to repay 50% of profits from sales. An enlightened policy which I expect others to follow.