CVC acquires secondaries specialist Glendower Capital

Harriet Matthews
13 September 2021

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CVC is to acquire Glendower Capital, establishing a strategic partnership that will see the secondaries firm continue to operate independently under the Glendower name.

Glendower's management will continue to lead the business. The combined group will have total assets under management of approximately EUR 113bn, according to the same statement.

The collaborative partnership will allow Glendower to leverage CVC's network and relationships.

Debevoise & Plimpton advised Glendower, while CVC was advised by Freshfields Bruckhaus Deringer and Goldman Sachs.

Headquartered in London, Glendower was formed in 2003 and was formerly part of Deutsche Bank's asset management division. The firm has operated independently since 2017.

Glendower Secondary Opportunities Fund V was registered in June 2020, according to Unquote Data. The fund has a USD 3.5bn target, according to a report from Buyout Insider. The vehicle makes secondary deals for primary funds, focusing on buyout, venture and growth strategies, as well as mezzanine, turnaround, special situations and funds-of-funds. In addition, the vehicle can target real estate and infrastructure opportunities.

The fund's predecessor vehicle held a final close in July 2019 on USD 2.7bn. The fund backed GP-led deals including the acquisition of a 40% stake in luxury department store Liberty at a GBP 300m valuation.

The GP registered Glendower Capital Secondary Opportunities Overage Fund II in June 2021. The vehicle targets mid-cap and large-cap buyout strategies, as well as growth strategies.

The firm has made more than 130 transactions involving more than 900 fund interests since its inception, according to a statement. The firm employs 55 staff and has an additional office in New York.

The deal is expected to close in Q4 2021 and will see CVC join the ranks of large-cap managers with multiple private markets strategies that include secondaries, such as Ardian, Blackstone and Neuberger Berman. KKR does not yet have a formal secondaries strategy, although co-president and co-chief operating officer Scott Nuttal said in the firm's Q1 2021 earnings call that the firm is continuing to review options to build a secondaries platform, either by building up a practice or through an acquisition.

CVC's acquisition of Glendower follows US-based asset management firm PGIM's acquisition of Switzerland-based small-cap secondaries specialist Montana Capital Partners in July 2021.

The secondaries market has continued to grow over the course of the pandemic, with GPs and LPs alike favouring the liquidity offered by GP-led deals and LP stake deals alike. According to Unquote Data, GPs have raised EUR 27.1bn for their secondaries strategies across 14 first and final closes in 2021 to date. This follows a bumper year for secondaries in 2020, which saw GPs raise EUR 66.8bn across 29 first and final closes. These included Ardian's USD 19bn final close for Ardian Secondary Fund VIII and the USD 14bn final close of Lexington Capital Partners IX.

Eurazeo announced in July 2021 that it had raised EUR 1bn for its secondaries programme, including EUR 700m for Idinvest Secondary Fund IV, as reported. Upcoming fund launches include StepStone's fifth Secondary Opportunities fund, which the GP registered earlier in September, as reported. Schroders registered its fourth secondaries fund in February 2021, as reported.