Portfolio analysis

This page contains analysis of the investment portfolio at 30 June 2014.

The management buyout funds portfolio represents the majority of SVG Capital’s net investment portfolio (80% at 30 June 2014). It is invested in eight funds with an underlying portfolio of 45 companies.

  30 Jun 2014 31 Dec 2013
Value £873.3m £859.0m
Percentage of investment portfolio 80.0% 80.7%

Performance overview

Key features of H1 2014:

  • 3.0% total return largely driven by gains in the quoted share prices of Freescale and Hugo Boss as well as an uplift in value of Acromas following the sale of The AA and flotation of Saga.
  • Significant distributions received following the final realisation of ProSiebenSat and a partial realisation of Legico.
  • Increased pace of calls to finance our new investments, including our first co-investment (The Hillman Group).
  • Most companies continue to report good earnings growth, especially those with exposure to diversified global revenue streams.

 

Major unrealised portfolio movements 

Three largest movements over H1 2014:

  • Freescale’s quoted share price increased by 46.5% as the company continued to perform strongly. Q2 2014 revenues, gross margins and earnings per share all reported solid improvement, both sequentially and year-on-year. All five product groups contributed, driving consistent gains in market share.
  • Hugo Boss’ quoted share price reported an 8.5% total return as the company continues its growth trajectory. Management have reconfirmed their plan to achieve high single-digit sales growth for the year, after adjusting for currency effects.
  • Acromas completed the full realisation of its holding in The AA through an IPO. In addition, Saga also completed an IPO, although Acromas did not sell any of its existing shares in the transaction and continues to hold 72% of the issued share capital.

The Aberdeen SVG managed or advised funds portfolio represents the majority of the remaining investment portfolio and largely consists of investments in the SVG Diamond funds. The three SVG Diamond funds are leveraged private equity fund of funds products with diversified underlying portfolios of predominantly US and European focused buyout funds.

At 30 June 2014, this portfolio represented 17% of the net investment portfolio and is invested in five private equity funds of funds managed or advised by Aberdeen SVG Private Equity Advisers.

  30 Jun 2014 31 Dec 2013
Value £186.4m £165.0m
Percentage of investment portfolio 17.1% 15.5%

Performance overview

Key features of H1 2014:

  • 5.6% total return over the period as the underlying portfolios reported continuing valuation gains.
  • SVG Capital made a €30.0 million commitment to Aldwych Capital Partners which invests in a number of private equity funds managed by Carlyle. The commitment was 50% called at inception.
  • The underlying portfolios of private equity funds in the SVG Diamond funds are high quality and distributions have continued at an accelerated pace allowing deleveraging to occur ahead of previous expectations.

 

SVG Capital's look through exposure to the top five underlying private equity funds, in aggregate

Underlying fund

Manager

Geographic focus Vintage SVG Capital look-through
value at 30 Jun 2014
Permira IV Permira Global 2006 £22.1m1
Carlyle Partners V Carlyle US 2007 £19.2m
The Fourth Cinven Fund Cinven European 2006 £13.6m
CVC European Private Equity Partners V CVC Global 2008 £13.4m
Carlyle Europe Partners III Carlyle European 2006 £13.3m