SVG funds Permira IV

Permira has raised almost a third of its next fund Permira IV from SVG Capital, which has committed €2.8bn (£1.9bn) to the fund that is looking to raise €8.5bn (£5.9bn).

The Permira funds represent 75% of SVG Capital’s portfolio. It is expected SVG Capital’s commitment to Permira IV will be drawn down during the fund’s six year investment period. Funding will be provided from cash resources, distributions from SVG Capital’s portfolio of investments, a credit facility and an issue of long-term debt. SVG Capital’s portfolio has been cash generative and cash balances stand at £277m (€402m.)

Separately, SVG Advisers, funds managed and advised by SVG Capital’s fund management business, expects to make a commitment of approximately €1bn (£690m), in aggregate, to Permira IV. As part of this commitment, SVG Advisers will be launching several feeder vehicles for Permira IV. These vehicles will seek to provide investors with an attractive, structured access to Permira IV, typically at a lower minimum investment threshold than the fund itself.

SVG has not combined the two sums because the €2.8bn is a commitment from SVG Capital’s balance sheet, whereas the €1bn sum is from the fund management business SVG Advisers’ third party funds and advised products.

Andrew Williams, CEO of SVG Advisers, said: “SVG Advisers has modelled itself on providing investors with intelligent solutions to investing in private equity. A key feature in all of our funds has been sound structuring, an over-commitment policy and good investment selection. SVG Advisers currently has €2.4bn of third-party funds under management and commitments in three areas: open architecture fund-of-funds; public equity products that use private equity investment appraisal techniques; and feeder vehicles focused on Permira funds. The addition of the Permira IV feeder vehicles is consistent with our strategy and we are delighted to grow this area further.”

In March 2005, SVG Capital announced the formalisation of its relationship with Permira and agreed to be a major investor in future Permira Funds with approximately 80% of SVG Capital’s gross assets and uncalled commitments invested in or committed to Permira funds. At December 31, 2005, Permira Funds represented 75% of SVG Capital’s investment portfolio and 73% of its uncalled commitments.