Williams says that banks are the best judge and they are prepared to lend higher multiples to privately owned companies. Much of the debate about private equity has focused on the lack of transparency. Some backers justify this on the grounds that it is key to their success that competitors do not have access to information.

But as a quoted company, SVG publishes plenty of information that privately owned firms do not have to and do not wish to publish. Much more is known about Permira than would be the case were SVG not such a major investor, for example.

Ferguson and Williams say they favour transparency in line with the British Venture Capital Association (BVCA) guidelines. These recommend regular valuations, which SVG says is critical to cashflow planning.

'The interim data in America is poor,' says Ferguson. 'If I were in America I'd be campaigning heavily for more disclosure on the BVCA basis. This is what makes the UK market a more attractive option for investors in this sector.'

He uses the argument of 'perfect information' to support his view and cites the historic trading centre of Samarkand on the silk route (his latest holiday destination) as a case in point. 'Imagine that a silk trader told a customer that they should buy the silk but was not prepared to reveal its quality or size. He would not sell much silk.'

With increased accessibility to 'smaller' investors, the people selling stakes in private equity may find that they need to increase their accountability. Ferguson and Williams say this should not be a problem. They remain something of a minority and the investment warning caveat emptor remains as relevant as ever.

The background

SVG Capital

Headquarters 111 Strand, London

Founded by John McLachlan in 1996

Chief executive and chairman elect Nicholas Ferguson, former chairman of Schroder Ventures; educated at Edinburgh University (economics), Harvard Business School (MBA)

Share price 598.5p

Market capitalisation £551.5m. Compound growth in net assets per share over five years 8.3 per cent per annum. Total net assets £676.4m

SVG Advisers Established 2003

Chief executive Andrew Williams, former MD of Schroder Ventures. Educated at Oxford University (history)

Funds Four private equity funds, two public equity funds under management

Combined third-party funds under management and commitments £1.5bn

AGM 25 April 2005

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