The sale of fashion brands Hugo Boss and New Look have helped boost SVG Capital’s returns, even as a background of currency volatility weighed on its investment portfolio.
The listed private equity firm has, like its rivals, benefitted from a fertile market for asset sell-offs, and returned £101m of capital to investors in the last six months.
Net asset value (NAV), a measure of assets per share, rose three per cent over the past six months to 606p, from 521p in the same period last year.
Floats, including New Look and Hugo Boss, helped SVG to a record £366m cash-flow, and the sale of Hugo Boss came “at the right time” to reduce exposure to listed companies, down to 23 per cent of NAV.
Chief executive Lynn Fordham said: “At this point in the cycle, we believe the strength of our balance sheet places SVG in a good position to weather any uncertainty and take advantage of opportunities as they arise.” A hint perhaps that the fund does not expect the current record-high valuations to continue.
Three years ago, the Schroeders spin-off diversified from the European fund Permira, looking to the US. Fordam told City A.M. the group is still looking to expand its fund managers, up to eight or even 10 from the current five, and has already committed $100m (£65.6m) to an – as yet – unnamed US mid-market private equity manager, which is expected to close by the end of 2015.
Fordam also emphasised SVG’s commitment to investing in the “rich seam” of the pharma sector.