LONDON (Reuters) – SVG Capital Plc’s chief will depart as it mulls its strategy after heavy write-downs in the value of its portfolio, the largest investor in buy-out house Permira said.
SVG announced on Thursday the departure of director and chief executive of its fund arm SVG Advisers Andrew Williams as it launched a strategic review to be ready by April.
The group, which has some 88 percent of its investments in Permira, also wrote down the value of a number of its investments to zero, including those in gaming group Gala Coral and in broadcaster ProSiebenSat.1 (PSMG_p.DE).
“A number of our more cyclical companies are now on the balance sheet at nil and I would make the very simple point that it is very hard for them to go down further from that,” Chairman Nicholas Ferguson, who is stepping into the role of executive chairman until a replacement is found, said in a conference call.
A slew of private equity houses have marked down their equity stakes in companies they own to zero in the last few weeks as global equity markets tumble and the weakening economy darkens their outlook.
SVG said its full-year results net asset value (NAV) per share fell 64.3 percent for the year, finishing at 208 pence after the dilutive affect of the firm’s capital raising, which it completed earlier this week.
Permira declined to comment on the valuations of its individual portfolio companies, but said it had written down the value of its portfolio by 36 percent in 2008.
In December, SVG wrote down the value of its portfolio by 40 percent while capping its commitments in Permira’s fourth fund at 60 percent of its planned allocation, in return for a hefty 25 percent reduction in its investment returns.
Shares in the company were trading 0.3 percent lower at 91.5 pence by 1251 GMT.
SVG declined to speculate what the outcome of its strategic review would be, but said it was in discussons with shareholders.
“We haven’t ruled out any options,” Ferguson said.
Ferguson said implementation of the new strategy would take a number of years and Williams had decided he was not the person to see it through.
Earlier this week SVG closed its capital raising on 171.3 million pounds ($241.7 million) — short of its 209 million target — as it sought to prop up its finances to meet future capital call from Permira’s fourth fund.
“We now have sufficient resources to see us through five years,” said Ferguson.
While Ferguson said the new capital will allow SVG to take advantage of opportunities that will arise in the private equity market, he said: “We are not going to be making any new investment of any consequence to funds for some time.”
Following the capital raising, specialist secondary private equity investor Coller Capital will have about a 19 percent stake in SVG. However, Ferguson said Coller, which buys second-hand private equity assets from other investors, would not be taking a seat on the board. ($1=.7086 Pound) (Reporting by Simon Meads; Editing by Rupert Winchester and Jon Loades-Carter)