Permira portfolio growth boosts SVG

Strong growth among Permira’s portfolio companies has given cheer to the firm’s largest LP.

Earnings growth, improving multiples and balance sheet deleveraging have led to some significant write-ups across Permira’s portfolio.
 
Investments such as Galaxy Entertainment, a Macau-based casino operator, and fashion brand Hugo Boss, were written up as part of a broad recovery in operating performance and earnings.
 
Galaxy – which is listed on the Hong Kong Stock Exchange – has seen its share price soar by more than 56 percent in the third quarter, while Hugo Boss has been written up by nearly 20 percent over the same period, according to an interim results statement from SVG Capital, a listed investor in Permira’s funds.
 
Other investments to see their value increase include Arysta LifeScience, TDC, Provimi and ProSiebenSat.1.
 
Today’s positive numbers represent a recovery for many of the largest investments in Permira’s most recent fund: the 2006 vintage Permira IV. The likes of Galaxy, Arysta and Hugo Boss are still valued below their initial investment cost, according to SVG’s numbers.
 
SVG has been able to grow its net asset value by 19.4 percent in the third quarter of 2010. This is ahead of analyst expectation and its shares have jumped on the back of the results, rising nearly 14 percent in morning trading to 203 pence.
 
SVG undertook a number of measures over the last two years to strengthen its balance sheet, which is currently in good condition. The company is on the hook for £262 million (€299 million; $414 million) in capital calls, which is covered by its available cash and revolving credit facility, which totals nearly £270 million.
 
In the last three months SVG sold £16.4 million-worth of fund commitments in the secondary market to further boost its cash position.
 
Permira’s co-heads, Tom Lister and Kurt Björklund, are the subjects of November’s Privately Speaking in Private Equity International.