Private equity investor SVG Capital said asset values rose steeply in the first half as it kicked off a review of its longer term investment plans that could see it return money to investors via share buybacks.
SVG, seen by many as a listed proxy for buyout firm Permira, which accounts for more than 80 percent of its investment portfolio, said on Friday asset valuations rose 25 per cent in the six months to end-June to 393.9 pence.
"These were very good figures, some 5 percent ahead of our estimates and driven primarily by the fundamental of strong earnings growth," said JP Morgan Cazenove analyst Christopher Brown in a note.
Even factoring in market volatility and falls in listed Permira investments since end June, net asset value would be currently about 390 pence a share, SVG chief executive Lynn Fordham told reporters on a conference calls.
SVG has been a cornerstone investor in Permira's funds, pledging 2.8 billion euros (2 billion pounds) to the firm's fourth fund in 2006. That figure was later reduced when SVG saw it could struggle to meet all its cash calls and it launched a capital raising to repair its balance sheet.
With Permira due to start raising a new buyouts fund in September, SVG is to consult with shareholders over the company's longer term strategy.
"We are going to invest in private equity. What we are looking for is some degree of investment flexibility, matching risk and reward, matching assets and liabilities and having a bit more control over the calls," said Fordham.
Fordham said the group would consider an investment in Permira's fifth fund when it receives fundraising documents and the process kicks off in earnest.
And when it receives proceeds from sales of Permira's investments, she said the group could also return cash to shareholders via share buybacks should they continue to trade at a significant discount to net asset value.
Permira has been looking for buyers for animal feeds business Provimi, television production company All3Media and is considering listing NDS, the pay-TV technology company it co-owns with News Corp, according to people familiar with those situations.
City A.M. Reporter