CVC Capital Raises €26 Billion for Record Buyout Fund

CVC Capital Partners has raised €26 billion ($29.2 billion) for the world’s biggest-ever buyout fund, defying a challenging fundraising environment.

(Bloomberg) — CVC Capital Partners has raised €26 billion ($29.2 billion) for the world’s biggest-ever buyout fund, defying a challenging fundraising environment.

The European private equity firm secured commitments from new and returning investors, according to a statement on Thursday that confirmed an earlier Bloomberg News report. 

CVC only began raising its ninth buyout fund in January and initially targeted €25 billion. Demand was strong enough to take it past that figure, showing how the more established private equity firms can have an edge at a time when investors are becoming more selective about where to park their money. 

Private equity firms have seen their traditional model of leveraged buyouts hampered by higher interest rates. This is making it harder to do deals and generate outsized returns for investors, some of which are also scaling back allocations to the asset class. That has in turn hit efforts to raise fresh capital. 

EQT AB and Cinven have delayed the closings of their latest fundraisings, Bloomberg News has reported, while Apollo Global Management Inc. cut the size of it most recent flagship fund.

CVC is one of the world’s biggest private equity firms with roughly €140 billion under management, according to its website. Established in the 1980s by a group of venture capitalists including Steve Koltes, Donald Mackenzie and Rolly van Rappard, CVC is majority owned by its employees. 

Unlike large peers such as Apollo, Blackstone Inc. and Carlyle Group Inc., CVC remains unlisted. But the firm has been considering plans for an initial public offering and in 2021 agreed to buy secondary buyout specialist Glendower Capital in a deal that was seen as a way to diversify ahead of a possible IPO. A record fundraising may further bolster CVC’s case for such a move.

CVC has not made any firm decisions about when to pursue an IPO and any listing will depend on market sentiment, the people said.

The immediate challenge for CVC will be finding ways to spend its new pool of capital. Higher interest rates have increased the cost of financing deals, while buyers and sellers continue to tussle over price. The value of private equity acquisitions is down more than 50% to $263 billion in 2023, data compiled by Bloomberg show. 

CVC has this year struck deals to invest in Danish transport company Scan Global Logistics, Brazilian food distributor Delly’s and the Women’s Tennis Association. But it lost out to Brookfield Asset Management Ltd. in the battle for Middle Eastern credit card processor Network International Holdings Plc after deciding against a higher offer. 

The firm has also been busy exiting investments in the last twelve months, including offloading its stake in an industrial gas venture to Messer SE and selling energy explorer Neptune Energy Group Ltd. It also divested part of its holding in Swiss watchmaker Breitling AG. 

Read More: Inside CVC, the Secretive Buyout Firm Heading Into New Waters

–With assistance from Daniele Lepido and Tommaso Ebhardt.

(Adds recent divestments in last paragraph)

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