SVG profits as it cuts the cord with Permira

Shares in SVG Capital jumped more than 20% today as it said it will return £170 million cash to shareholders and loosen its ties with the massive Permira private equity group which presently accounts for 80% of its investment.

The moves come in response to growing pressure from shareholders - including its largest, Jeremy Coller's Coller Capital - on chief executive Lynn Fordham to come up with ways to boost the share price.

Today Fordham said that she had spoken to investors whose stake collectively make up 70% of SVG shares and was confident of getting backing for the changes.

SVG has been connected by an umbilical cord to Permira ever since it floated 15 years ago and has traditionally stumped up 30% of its funds although more recently this has come down to 20%.

Fordham said that spreading investments across perhaps half a dozen other private equity houses as well as Permira would provide SVG with a less lumpy cashflow making it easier to return cash to shareholders regularly. SVG tends to make very large investments fairly infrequently.

Fordham said: "Making more frequent decisions on investments means that you have more chance of modifying the direction you to in. It should also lead to lower fees."

She expects the first £50 million return to shareholders should start next year through a tender offer backed up by share buybacks. Future returns of cash will depend on Permira realising its investments.

SVG shares rose 35p to 200p.