CVC Capital Partners has kicked off plans to list on Euronext Amsterdam after around three years of speculation that it was laying the groundwork for an initial public offering.
It expects to raise a minimum of €1.25 billion via the IPO, which includes newly issued shares and the sale of shares by existing shareholders, with approximately €250 million of primary proceeds, according to a prospectus published this morning.
Several shareholders will be selling their stake in the firm. These are expected to include Danube Investment, an investment vehicle of Singapore’s GIC; Kuwait Investment Authority; Stratosphere Finance Company, a company wholly owned by the Hong Kong government; and certain management shareholders. None of the firm’s active employees are selling in the IPO.
The European buyout firm’s offering is expected to take place in the coming weeks. It reportedly aborted its IPO plans in November last year due to unfavourable market conditions.
CVC’s listing was valued at about $15 billion when it sold a minority stake to Blue Owl Capital in 2021, according to Bloomberg. Blue Owl plans to invest in as much as 10 percent of the offering, according to the prospectus.
CVC is the third-largest PE firm headquartered in Europe and 15th-largest globally according to the PEI 300. It hauled in €26 billion for the industry’s largest-ever fund last year.
The fund’s predecessor, CVC Capital Partners VIII, closed in 2020 on €22.3 billion and is 55.98 percent called as of September, according to documents prepared by the New York City Police Pension Fund. The fund has generated an IRR of 9.3 percent and TVPI of 1.09x.
The firm, which was founded in 1981, managed €186 billion of assets under management across private equity, credit, secondaries and infrastructure as of end-December. It owns stakes in Swiss watchmaker Breitling, Lipton Teas and Infusions and has extensive sports holdings including Six Nations Rugby, Women’s Tennis Association and Volleyball World and La Liga.
Here are three things to know about the planned IPO:
Growth plans
CVC’s listing is part of a plan to strengthen its balance sheet. Proceeds from the issuing of new shares will be used to scale the next generation of CVC funds, inorganic acquisitions and potentially funding a portion of the cash consideration payable as part of the agreed acquisition of Dutch infrastructure firm DIF Capital Partners, according to the prospectus.
The firm expects to expand geographically into Asia with its infrastructure, strategic opportunities and growth segments. It is also set to launch an infrastructure secondaries product and target “direct private markets adjacencies,” the document notes – as has been achieved with secondaries and infrastructure.
Expanding investor base
CVC is set to widen its LP base by tapping the wealth channel via the creation of “tailored products and solutions for US and European insurers and creating semi-liquid private equity, secondaries and credit products.”
As of December 31, 2023, CVC’s client base comprised more than 1,000 LPs, including 14 of the 15 largest US pension funds and 12 of the 15 largest sovereign wealth funds. The average relationship length is 17 years for these clients, the firm says.
Voting rights
When the IPO happens, the firm will use a ‘one share, one vote’ model. CVC’s board will consist of one non-executive chair and four independent non-executive directors.
Rob Lucas will serve as chief executive, while Fred Watt will be chief financial officer.
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