SVG Capital returns surge by a third as diversification pays off

LONDON Thu Feb 13, 2014 5:05am EST

LONDON Feb 13 (Reuters) - British private equity firm SVG Capital saw returns on its investment portfolio jump almost a third in 2013, helped by diversification and a strong performance from designer brand Hugo Boss and German media firm ProSiebenSat.1.

The firm, which gives investors access to funds such as Permira, said on Thursday returns increased 28.9 percent, while earnings per share grew 31.5 percent to 514.5 pence last year.

"We've had four years of outperformance, double-digit outperformance of the indices," said Chief Executive Lynn Fordham. The MSCI World Index for equities grew 24.1 percent in 2013.

SVG, spun out of the private equity arm of Schroders in 1996, is looking to diversify its portfolio. Last year it invested 140 million pounds in leading U.S. buyout firm Clayton Dubilier & Rice to increase exposure to the U.S. market.

However the firm added that market volatility in 2014 had reduced its portfolio earnings per share to 500 pence.

"We're always pretty cautious," Fordham said. "Everyone's watching the U.S., aren't they really, and the emerging markets."

Since a strategic review in 2011, the company has sought to increase share buybacks. The firm plans to tender a 50 million pound repurchase in May, following on from its latest buyback in December.