The four years spent preparing last year’s private equity CFO, SVG Diamond, will soon be put to good use. Sequel SVG Diamond 2 is in preparation with SVG Advisors and bookrunner Nomura.
“There is no set date, but we are looking to close in the autumn,” said Sam Robinson from SVG. He said that the structure would be similar to SVG Diamond 1, which raised €400m at the end of last September, although the new deal might be sized at €500m.
“We do expect the equity base to be broader than the three, including us, that participated last time, but the focus will be exactly the same,” Robinson said. “The structure will be as unchanged as possible, given that we spent two years conceptualising and another two years implementing the first one, including plenty of time getting the rating agencies up to speed.”
Diamond’s Triple A notes priced at plus 90bp, while Tenzing from Invesco Private Capital – the other recent private equity CFOs in Europe – had Triple A notes at plus 70bp in early January.
According to Robinson, the key focus now is on building up a portfolio of secondary private equity investments. These are needed to get the transaction off to a good start, while primary opportunities are being identified.
Diamond 1 required €100m of secondary investment in the first six months, which has been achieved, while a further €50m is required over the next six months in what is a very competitive market for assets. Investors in Diamond 2 might well swap secondary private investments for equity, Robinson added, which is what SVG has done and is quite an attractive proposition for some investors.