PRIVATE-EQUITY and fund management firm SVG Capital, owner of a 25 per cent stake in Dublin corporate financier Key Capital, has raised £320 million (€405.75 million) through a bond issue and the sale of assets to make new investments as capital markets recover.
SVG, whose prime investments are in funds managed by private-equity giant Permira, said the money will strengthen its balance sheet and liquidity position.
This will provide greater flexibility to take advantage of opportunities arising from the launch of new private-equity funds and for “general corporate purposes”, the company said. The group intends to take advantage of new investment opportunities as capital markets recover after a prolonged period of exceptional volatility. With liquidity in short supply, SVG believes significant opportunities will fall to companies with access to liquidity.
The likely vehicles for such investments are Permira and SVG Advisers, a private-equity offshoot of the company. SVG Advisers’ investments include the €150 million Key Capital SVG CLO Equity Fund, which takes positions in leveraged buyout loans underlying the European private-equity market.
SVG yesterday raised £120 million through a convertible bond with a coupon of 8.25 per cent.
Key Capital was financial adviser to SVG on the bond issue and co-lead manager with Royal Bank of Scotland on the issue. JPMorgan Cazenove was bookrunner. SVG said the conversion price of 1000p represents a premium to SVG’s net asset value of of 974.3p at the end of 2007.
Having realised some £100 million in recent weeks from the sale of its interest in German telco Debitel and Asian private hospital operator Parkway, SVG said yesterday it realised an additional £102.4 million through the disposal of its interests in six private-equity funds. These were acquired by Lexington Partners and SVG Diamond Private Equity Holdings.
“We believe that the current market environment will produce a number of interesting investment opportunities which will have the potential to provide superior returns for SVG Capital and its shareholders over time and have taken the opportunity to further strengthen our balance sheet ahead of this,” said SVG chairman Nicholas Ferguson.
Shares in SVG lost 1p on the London market to close last night at 750p.
