SVG Capital, the biggest investor in buyout firm Permira, saw its shares rebound yesterday after it cut debt and saw the companies it owns improve their performance, sending its shares soaring.
The private equity investor said its net asset value per share rose 30 per cent to 222.9p from six months ago. Chief executive Lynn Fordham said: “Many portfolio companies show a meaningful improvement in cash-flow generation and earnings growth.”
SVG shares rose to their highest level since late in 2008, when they collapsed at the height of the credit crisis, closing 6.9 per cent up at 143p.
Permira reduced debt across its portfolio in 2009 by €4.5bn (£4.1bn); in cases like Valentino Fashion Group buying back debt from lenders at a discount to relieve the over-burdened balance sheet. Permira itself wrote up the value of its portfolio by 24 per cent in the second half and by 22 per cent for the full year, as improving stock market comparisons lifted portfolio firms.
While private equity dealmaking is showing signs of coming back to life, buyout firms wanting to float their businesses have received a knock-back from public markets. Permira, with deal partner Apax, put plans to list New Look on ice last month after investors rebelled against plans to use £450m of the proceeds to pay off debt.