Virgin to act as private equity in sell-off

August 2007

Sir Richard Branson and his Virgin Group are planning a new investment strategy that will see the group operate like a private equity firm, reports the Times.

Virgin has traditionally been unreceptive towards public markets, but the group now plans to operate like a private equity firm and sell off its businesses on the stock market.

Although Virgin plans to float its businesses, the company will keep a stake in them and keep directors on their boards to protect the brand name.

The Virgin Group initially went on the stock market in 1986, but Sir Richard backtracked two years later, blaming his frustration at apparently short-termist institutions.

In an interview with the Times, Stephen Murphy, chief executive and head of Virgin's investment committee, said: "Once we have built a company to a point where it has reached a level of stability and maturity we will seek a public exit.

"We are much more comfortable with that idea now but there are no firm targets of how many businesses we want to float."

Mr Murphy told the paper that Virgin would be using its strong brand to launch new ventures and build on existing businesses, in a strategy of "branded venture capitalism".

He added: "Private equity buyers have now become a viable alternative and many listings are being pre-empted by these buyers."

Virgin has already started looking for a New York listing for their Virgin Mobile USA branch and, Virgin Active, the health club chain, looks likely to be the next to float.

The airline, Virgin Atlantic, could also find its way onto the stock market or into the hands of private equity - Singapore Airlines is considering selling its 49 per cent stake in the company.

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