GP Profile: CVC Capital Partners

Best known for its investments in Formula One – sold less than a year ago – and Sky Bet, and with a plethora of funds to its name, CVC Capital Partners is one of the oldest private equity houses in Europe. It started out life in 1981 as Citicorp Venture Capital, a subsidiary of Citigroup, but became independent in 1993.

The sponsor is fresh from raising its seventh fund – CVC Capital Partners VII – last month on its €15.5bn hard-cap. The fund originally targeted €12.5bn and had a hard-cap of €15bn when it was announced in November 2016. CVC and its employees were also set to make commitments, bringing the total equity capital available to €16bn. It is not clear whether these contributions will be invested through the fund or structured as co-investments.

CVC's first fund was raised in 1996 with $300m in commitments – with half coming from Citicorp and the remaining from institutional investors and high-net-worth individuals. The vehicle signalled the shift from venture capital investments to leveraged buyouts. The second fund – often thought of as its first fund and hence named CVC European Equity Partners I since it was the first fund raised independent of Citigroup – was closed in 1996 and raised $840m.

From 1996 onwards the GP has raised six European funds: CVC II raised $3.3bn in 1998; CVC III raised $3.7bn in 2001; CVC IV raised $6bn in 2005 and was the biggest among its peers at the time; CVC V raised €10.7bn; and CVC VI raised €10.9bn in 2013.

Concurrent to the European strategy, CVC launched three funds focused on Asia. The GP also raised €1bn for its growth fund focusing on European and US mid-market businesses with a technology angle in 2016.

Click here to view a complete profile of CVC Capital Partners, including details of funds, LPs and investments on unquote" data

Investments
According to unquote" data, since 2014, the sponsor has invested most in the UK by volume and by value. In terms of sectors, there has been a bias towards industrials and consumer when looking at both the volume and value of investments. 

Concurent with its seventh European fundraise, the private equity house has been acquisitive in the first half of 2017, mostly using capital from Fund VI and making nine new investments. These included Polish supermarket group Zabka Polska in February and Spanish healthcare centre manager Vitalia Home in March. CVC also bought a 25% stake in Spanish oil transportation and storage business Compañia Logistica de Hidrocarburos in April. Other deals include UK-based Pension Insurance Corp in February; Belgian aluminium manufacturer Corialis in March; Athens-headquartered Metropolitan Hospital Group and Swiss luxury watch manufacturer Breitling, both inked in April; and Swedish online travel agent Etraveli and Italian leather components manufacturer Pasubio in June.

The private equity house garnered much attention last year when its 10-year stint at the helm of Formula One came to end, as the sponsor together with other shareholders decided to sell the motorsport business to Liberty Media. The much publicised deal valued the company at $8bn.

Its tenure as majority shareholder was not free from controversy with a court case surrounding bribery allegations brought against CEO Bernie Ecclestone, as well as former BayernLB banker Gerhard Gribkowsky being sentenced to eight years and six months in prison following his trial for corruption, breach of trust and tax evasion. Gribkowsky admitted to taking bribes amounting to $44m from F1 chief executive Ecclestone during the sale of the company to CVC.

Through the years, the sponsor has completed in excess of 300 investments and currently has roughly 50 companies in its portfolio, which jointly generate in the region of $100bn in turnover per year.

CVC has 20 offices across the world. The most recent openings were San Francisco in 2015, Bangkok in 2012, Shanghai in 2010 and New York and Singapore in 2007.

Debt strategy
CVC Credit Partners began life as CVC Cordatus in 2006, focusing on CLO management. In 2014, the credit specialist brought in Neale Broadhead from Lloyds and Chris Fowler from GE Capital to lead the European direct lending team. The group's latest fundraise was a Global Special Situations Fund in June 2016, which will have a particular focus on Europe, exceeded its €600m target and received commitments from new and existing LPs.

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