SVG raises €700m for its latest fund of funds

The investment arm of SVG Capital has closed its latest structured fund of funds €200 million ahead of target, while introducing innovation in the fund’s gearing.

SVG Advisers, the fund management arm of SVG Capital, has closed SVG Diamond III, its latest structured private equity fund of funds, on €700 million, €200 million ahead of its original target.

The fund took marginally longer to close than expected after the UK Chancellor’s annual budget forced changes to the documentation. The company had been targeting a close towards the end of March.

The fund has attracted investors from across the spectrum including high net worth individuals and family offices, investment managers, pension funds, insurance companies and banks.

Sam Robinson, director SVG Capital, said: “It definitely helped that the previous two products were performing to plan, even though Diamond II is just a year old.”

Like its predecessors the fund is leveraged to enhance returns using a revolving credit facility of €420 million against €280 million of equity deployed. 
The revolving credit facility replaces the rated bonds used in SVG Diamond I and II, allowing for more efficient cash management and greater flexibility in the portfolio ramp-up, the company said.

The debt package was arranged and underwritten by Bank of Scotland Corporate. HSH Nordbank acted as sub-underwriter for a portion of the debt.
SVG Diamond III is focusing on large and mid-market buy-outs in Europe and the US and will have an over-commitment facility of up to 140 percent, allowing a target investment capacity of €980 million. This ensures the fund is fully committed even when early investments begin to return cash.

Following the transfer of a portfolio of 17 funds, representing total commitments of €289.1 million, SVG Diamond III will be approximately 41 percent committed at closing to minimise cash drag. 

SVG Capital’s fund management business, SVG Advisers, is the investment manager and adviser responsible for all fund recommendations, bringing its total third-party funds under management and commitments to €4.1 billion.