News & Analysis

CVC's new master processor

The London firm led by Michael Smith has hired a COO—the former CFO of Royal Bank of Scotland.

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In the 17 years since its inception in 1990, CVC Capital Partners, the global LBO investor officially based in Luxembourg, never saw a need for having a chief operating officer ? until now. In September, the firm announced the appointment of Fred Watt in the newly created chief operating officer role, in a bid to professionalize its operations.

Watt's résumé certainly looks suitable for the job. He has spent more than 25 years working for a succession of public and private companies, primarily in financial roles. From 2000 to 2006, he served as chief financial officer at the Royal Bank of Scotland. Senior corporate positions do not come much bigger than that.

After leaving RBS, Watt pursued a number of projects. Last summer, he was hired by Doughty Hanson as chief financial officer of a €1 billion ($1.4 billion) listed private equity fund the mid-market firm was marketing at the time. In October, Doughty Hanson abandoned the project when the Euronext stock market in Amsterdam proved unreceptive to the product.

At CVC, Watt will sit on the group management committee and the board of directors.

Michael Smith, chairman of CVC Group, cited the firm's rapid growth, the convergence of public and private markets and the demands on the industry for greater transparency among the reasons for creating Watt's role.

One of the first major tasks Watt will likely get involved in is the integration of CVC Asia Pacific into the rest of the firm. Practically coinciding with Watt's arrival this summer was CVC's termination of a long-standing joint venture agreement with Citi, the investment bank, under which CVC Asia Pacific had operated since its inception in the late 1990s.

CVC is currently investing its fourth European buyout fund, which has a total of €10 billion of equity capital to deploy. In Asia, the firm is investing its second Asia Pacific fund, a $2 billion vehicle. Plans for a $4 billion third Asian fund came to light in September.

The firm has 46 companies in the portfolio. One hundred and fifty professionals in 18 offices manage CVC's investments.