SVG Capital

SVG Capital was a British private equity and investment management business headquartered in London. The company was established in 1996 to acquire the private equity interests of Schroder Venture Group, commonly referred to as SVG, and was listed on the London Stock Exchange in the same year under the ticker SVI. Its principal activity was to invest in private equity funds and related vehicles rather than to operate a conventional consumer-facing product business. The company built exposure to private equity through interests in funds managed by established investment firms, including Permira. Permira-related investments represented more than half of SVG Capital's portfolio by value at one point, giving the company a concentrated exposure to a major private equity manager. SVG Capital also used structured investment vehicles to support its investment program. Its Diamond program included SVG Diamond, established in 2004, SVG Diamond II in 2006, and SVG Diamond III in 2007. These collateralized fund obligation structures were used to raise capital for private equity investments. SVG Capital periodically realized investments and reorganized parts of its operating platform. In May 2008, it announced the sale of £102 million of limited partnership interests in six private equity funds to Lexington Partners and SVG Diamond. In 2013, it sold a 50.1 percent interest in SVG Advisers to Aberdeen Asset Management for £17.5 million and later sold SVG Investment Managers to Swiss investment company Hansa AG on undisclosed terms. Aberdeen subsequently acquired SVG Capital's interest in the Aberdeen SVG Private Equity Managers joint venture for £29 million in April 2015. The company also experienced market volatility in its investment portfolio. In October 2012, its shares in Hugo Boss fell by 12 percent during a temporary decline. By 2016, SVG Capital was considering proposals concerning the disposal of its portfolio. It rejected an offer from Pomona Capital and Pantheon Ventures for half of the portfolio while seeking more advantageous terms. It ultimately agreed in October 2016 to sell its portfolio to HarbourVest for £807 million, following a more favorable proposal involving Goldman Sachs Alternatives and the Canada Pension Plan. After the portfolio transaction, SVG Capital moved toward liquidation rather than continuing as an operating investment company. In April 2017, it announced plans to appoint a liquidator to manage the final distribution to shareholders. The company was scheduled to wind up on 29 June 2017, subject to shareholder approval. SVG Capital therefore ended as a listed private equity investment vehicle whose final phase centered on realizing investments, distributing proceeds, and closing the corporate structure.

SVG Capital was created in 1996 to acquire the private equity interests of Schroder Venture Group, known as SVG. The company was listed on the London Stock Exchange in the same year, making it a public investment vehicle through which shareholders could obtain exposure to private equity assets. Rather than developing a broad range of consumer products, SVG Capital concentrated on investments in private equity funds and associated management interests. Its portfolio included substantial commitments to funds managed by Permira, which at one stage accounted for more than half of the portfolio by value. This concentration reflected SVG Capital's origins and its focus on specialist private equity relationships. The company developed a structured finance component to its investment model through its Diamond program. SVG Diamond was established in 2004, followed by SVG Diamond II in 2006 and SVG Diamond III in 2007. These collateralized fund obligation vehicles were used to raise capital for private equity investments and formed part of SVG Capital's broader approach to financing fund exposure. In May 2008, SVG Capital announced the sale of £102 million in limited partnership interests in six private equity funds to Lexington Partners and SVG Diamond. The transaction represented a portfolio realization and demonstrated the company's use of secondary-market transactions in managing its assets. SVG Capital's market value and reported performance were also affected by movements in underlying investments. In October 2012, its Hugo Boss shares declined by 12 percent during a temporary downturn. SVG Capital reduced and reshaped parts of its investment management platform during the following years. In February 2013, it sold 50.1 percent of SVG Advisers to Aberdeen Asset Management for £17.5 million. In August of the same year, it sold SVG Investment Managers to Hansa AG, a Swiss investment company, although the consideration was not disclosed. In April 2015, Aberdeen acquired SVG Capital's stake in the Aberdeen SVG Private Equity Managers joint venture for £29 million. The decisive strategic change came in 2016, when the company considered proposals to dispose of its investment portfolio. SVG Capital rejected a proposal from Pomona Capital and Pantheon Ventures covering half of the portfolio while seeking more favorable terms. It later accepted an offer from HarbourVest, announced in October 2016, for the portfolio at a value of £807 million. The transaction effectively moved the company from portfolio ownership toward realization and return of capital. In April 2017, SVG Capital stated that it would appoint a liquidator to oversee final distributions to shareholders. The proposed winding-up date was 29 June 2017, subject to a shareholder vote. Following this process, SVG Capital ceased to operate as an active listed private equity investment company. Its history is therefore principally one of public-market private equity investing, structured fund exposure, portfolio disposals, and an eventual orderly liquidation.

• 2017

  Planned winding-up

  [1]SVG Capitalen.wikipedia.org

  SVG Capital announced plans to appoint a liquidator and wind up the company, subject to shareholder approval.

• 2016

  Portfolio sale to HarbourVest

  [1]SVG Capitalen.wikipedia.org

  SVG Capital agreed to sell its portfolio to HarbourVest for £807 million after considering alternative proposals.

• 2015

  Exit from Aberdeen SVG Private Equity Managers

  [1]SVG Capitalen.wikipedia.org

  Aberdeen acquired SVG Capital's stake in the joint venture for £29 million.

• 2013

  Disposals of investment management interests

  [1]SVG Capitalen.wikipedia.org

  SVG Capital sold 50.1 percent of SVG Advisers to Aberdeen Asset Management and sold SVG Investment Managers to Hansa AG.

• 2008

  Sale of fund interests

  [1]SVG Capitalen.wikipedia.org

  The company announced the sale of £102 million of limited partnership interests in six private equity funds.

• 2007

  Launch of SVG Diamond III

  [1]SVG Capitalen.wikipedia.org

  SVG Capital expanded its structured investment program with SVG Diamond III.

• 2006

  Launch of SVG Diamond II

  [1]SVG Capitalen.wikipedia.org

  The second vehicle in the Diamond program was established to support additional private equity investment financing.

• 2004

  Launch of SVG Diamond

  [1]SVG Capitalen.wikipedia.org

  SVG Capital established SVG Diamond as part of a collateralized fund obligation program supporting private equity investment financing.

• 1996

  Formation and London listing

  [1]SVG Capitalen.wikipedia.org

  SVG Capital was established to acquire the private equity interests of Schroder Venture Group and was listed on the London Stock Exchange during the same year.

A listed British investment company providing public-market access to a diversified, although at times concentrated, portfolio of private equity funds and related investment vehicles. Its activities were institutional and financial rather than consumer-facing.

• Investment portfolio · 1996

  Private equity fund portfolio

  SVG Capital's central offering was its listed investment-company structure and the underlying portfolio of private equity fund interests. The portfolio included significant exposure to Permira-managed funds and other private equity investments. SVG Capital did not sell consumer goods; its economic proposition was access to private equity investments through a publicly traded company.

• Collateralized fund obligation vehicle · 2004

  SVG Diamond

  SVG Diamond was a structured investment vehicle established in 2004 as part of SVG Capital's Diamond program. Together with SVG Diamond II and SVG Diamond III, it was used to raise capital for private equity investments and to structure exposure to private equity fund assets.

• Collateralized fund obligation vehicle · 2006

  SVG Diamond II

  SVG Diamond II was the second identified vehicle in SVG Capital's collateralized fund obligation program. It formed part of the company's structured approach to financing and holding private equity investments.

• Collateralized fund obligation vehicle · 2007

  SVG Diamond III

  SVG Diamond III was established in 2007 as the third vehicle in the Diamond program. Like the earlier vehicles, it supported capital raising for SVG Capital's private equity investment activities.

• 2017

  Decision to wind up the companyStrategy

  Background

  Following the portfolio sale, SVG Capital no longer had the same active investment portfolio and planned to return remaining value to shareholders.

  Action taken

  The company announced that it would appoint a liquidator and seek approval to wind up on 29 June 2017.

  Aftermath

  SVG Capital ceased to operate as an active listed private equity investment company after the final distribution and winding-up process.

  Source

• 2016

  Sale of the investment portfolio to HarbourVestM&A

  Background

  SVG Capital considered competing proposals for its portfolio, including a proposal from Pomona Capital and Pantheon Ventures covering half of the portfolio.

  Action taken

  After seeking more favorable terms, SVG Capital agreed to sell its portfolio to HarbourVest.

  Aftermath

  The sale placed the company on a liquidation path and shifted its focus from managing investments to distributing realized value to shareholders.

  Portfolio sale value. £807 million (October 2016)

  • Pomona Capital and Pantheon Ventures — They had submitted an alternative proposal concerning half of SVG Capital's portfolio; the proposal was rejected.

  Source

• 2015

  Exit from Aberdeen SVG Private Equity ManagersM&A

  Background

  SVG Capital held an interest in the Aberdeen SVG Private Equity Managers joint venture.

  Action taken

  Aberdeen Asset Management acquired SVG Capital's stake in the joint venture.

  Aftermath

  The transaction further reduced SVG Capital's involvement in investment management operations.

  Sale consideration. £29 million (April 2015)

  Source

• 2013

  Sale of SVG Advisers interestM&A

  Background

  SVG Capital reorganized its interests in investment management businesses.

  Action taken

  It sold a 50.1 percent stake in SVG Advisers to Aberdeen Asset Management.

  Aftermath

  Aberdeen became the controlling owner of the business, while SVG Capital continued other portfolio and investment activities at that stage.

  Sale consideration. £17.5 million (February 2013)

  Source

• 2008

  Realization of limited partnership interestsStrategy

  Background

  SVG Capital reviewed parts of its private equity fund portfolio and identified limited partnership interests for disposal.

  Action taken

  It announced the sale of £102 million of interests in six private equity funds to Lexington Partners and SVG Diamond.

  Aftermath

  The transaction reduced part of the portfolio and represented an early documented realization of fund investments.

  Value of limited partnership interests sold. £102 million sold (May 2008)

  Source

• 2017

  SVG Capital announced plans for liquidation[1]SVG Capitalen.wikipedia.org

  Bankruptcy

  The company announced that it would appoint a liquidator to manage final distributions to shareholders and seek approval to wind up on 29 June 2017.

• 2016

  SVG Capital agreed to sell its portfolio to HarbourVest[1]SVG Capitalen.wikipedia.org

  M&A

  After considering competing proposals, SVG Capital agreed to sell its portfolio to HarbourVest for £807 million.

• 2015

  Aberdeen acquired SVG Capital's stake in a private equity management joint venture[1]SVG Capitalen.wikipedia.org

  M&A

  Aberdeen Asset Management acquired SVG Capital's interest in Aberdeen SVG Private Equity Managers for £29 million.

• 2013

  SVG Capital sold a controlling interest in SVG Advisers[1]SVG Capitalen.wikipedia.org

  M&A · Other

  SVG Capital sold 50.1 percent of SVG Advisers to Aberdeen Asset Management for £17.5 million.

• 2013

  SVG Capital sold SVG Investment Managers[1]SVG Capitalen.wikipedia.org

  M&A

  SVG Capital sold SVG Investment Managers to Swiss investment company Hansa AG; the transaction value was not disclosed.

• 2012

  SVG Capital's Hugo Boss holding fell sharply[1]SVG Capitalen.wikipedia.org

  Other

  The company's Hugo Boss shares experienced a temporary 12 percent decline, illustrating volatility in one of its portfolio holdings.

• 2008

  SVG Capital sold limited partnership interests in six private equity funds[1]SVG Capitalen.wikipedia.org

  M&A · Other

  SVG Capital announced the sale of £102 million of limited partnership interests to Lexington Partners and its SVG Diamond collateralized fund obligation vehicle.

1. 1SVG Capitalen.wikipedia.org