Investment Trust Insider: The pick of the PE trusts

SVG said last March it intended to diverse its portfolio away from Permira and has not, as yet, announced that it will invest in the new fund.

SVG’s net asset value at end December was 391p and, although no major disposals have been announced since then, it should have increased in line with the improvement in listed markets. At 356p SVG’s shares are probably trading on a circa 15% discount – not especially cheap. The new capital return programme should help underpin the discount but further share price appreciation will be driven largely by the remaining Permira IV investments.

Another stock to do well over the past quarter is 3i, which has just announced the sale of Mold Masters for £615 million. Mold Masters was one of its largest investments and it was sold for a decent profit. There are supposed to be several other disposals on the way, including Civica and Scandlines. The interesting thing will be to see how 3i redeploys the proceeds – it is some time since it made a meaningful private equity investment.

3i chief executive Simon Borrows was recently reported to have said it was not seeing many quality opportunities. Its shares have been driven higher on speculation, encouraged by the company, that it is to be the subject of a roughing up at the hands of a new Sherborne vehicle.

Since Sherborne is now sitting on a tidy profit on its initial modest foray into 3i’s shares, if I were running the Sherborne vehicle, I would be inclined to book the profit (circa £8 million) and wait for the excitement to die down (3i’s discount is probably less than 10% today) – maybe turning my attention elsewhere. It could even be that the dealing in 3i was a feint while Sherborne builds up a stake in another fund.

James Carthew is director of Sapient Research