The Insider: City deals uncovered

SVG Capital recently published decent half-year results which revealed a 4% increase in net asset value (NAV) per share to 535p, despite the strong pound. It had a pretty good investment performance, too, and there have been far more new investments. Why, then, is chief executive Lynn Fordham selling shares in the private equity investor?

Fordham, who has run the company for the past five years, has just sold 35,000 SVG shares at 426.6p each, netting her almost £150,000. It comes just two months after she offloaded 33,715 shares as part of SVG's tender offer at 480p, trousering an impressive £162,000.

But SVG is doing well, and Fordham’s sales are the result of some lucrative share options awarded to her under the company's 2007 performance share plan, worth £3.7 million at today's share price.

Fordham exercised 853,240 share options at the end of May and immediately sold over 500,000 at 415p to cover the resultant tax bill and to diversify her investment portfolio. Even then, her stake in SVG had ballooned to 547,000 from less than 195,000, and she still owns 478,209 worth over £2 million.

"We remain positive on the long term outlook for private equity, albeit we are cautious about pricing and leverage levels in certain areas of the market currently," she said on Monday.

Advanced Computer Software

The money is flowing at AIM-listed Advanced Computer Software, too. Last summer, chairman Michael Jackson exercised a put option over his remaining shares in the management share scheme, almost doubling his stake in the healthcare and office IT services provider by 1.6 million to 3.4 million shares.

Jackson has been winding down his stake ever since. In October, he sold one million at 87p, and another million in February at between 108p and 112p. Then, in July, Jackson sold 150,000 at almost 119p "for personal reasons," and 200,000 at around 116p.

This week, Jackson finally completed his exit, selling the last million shares at a fraction either side of 116p. Phew.

It’s probably not a bad move. ACS shares traded as low as 15p in 2008 and were still just 37p three years ago. But they’ve been on a steady upward trend ever since and there’s certainly strong technical support at around current levels (114-118p), just above the 200-day moving average.

Full-year results, published in June, showed revenue up two-thirds at £203 million, generating 18% growth in underlying earnings per share (EPS) to 6.6p. ACS has now delivered five-year compound annual growth rate of 46% on revenues, 45% on cash profits and 53% on cash generation. The order book had swelled to £209 million, too.

Broker Edison expects EPS of 7p this year and 7.6p in 2016, putting ACS shares on a forward price/earnings ratio of 17, dropping to 15.5 a year later. That's a small discount to the UK software and IT services sectors, and there’s scope here for earnings upgrades if management continue to deliver on cross-selling opportunities.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.