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GP Profile: Cinven

Unquote's In Profile series
With six investments made from its 2016-vintage €7bn fund, unquote" takes an in-depth look at the European PE veteran and its track record
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  • Established in 1977
  • 120 companies acquired to date 
  • Currently investing its €7bn sixth vehicle
  • Recent CPA Global sale generated 3x money

Currently deploying capital from its €7bn sixth fund, Cinven has invested in more than 120 companies in transactions valued in excess of €70bn, according to the GP's website. Denise Ko Genovese takes an in-depth look at the GP's track record

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

Cinven started out life in 1977 as the in-house leveraged buyout and venture capital arm of the British Coal Pension Fund, working from a single office in London. Indeed, the GP's name is a loose acronym for coal investors' nominees for venture capital. From that single office 30 years ago, there are now a further eight offices in Frankfurt, Guernsey, Hong Kong, Luxembourg, Madrid, Milan, New York and Paris.

The private equity house is currently investing its sixth fund. Raised in 2016, Cinven VI closed on €7bn, with 90% of existing LPs recommitting to the fund. There were two original pre-1995 pension fund investors: British Coal and Oak Pension Asset Management – formerly Barclays pension fund. Both have been supporters for more than 20 years. The GP also confirmed at the time that there was significant new investor demand. According to unquote" data, New York State Common Retirement Fund committed $256.5m to Sixth Cinven Fund with Canada Pension Plan Investment Board committing €250m and Washington State Investment Board committing $307m. In total, Cinven has more than 150 institutional investors from 22 countries.

There have been six investments from the sixth fund to date, including in Allegro, Bioclinica, Chyrso, NewDay, Planasa and Stada.

Prior to this, Cinven completed its fifth fund by holding a second final close on €5.3bn in June 2013. This followed a previous final close on €5bn in March 2014. As a number of investors were unable to commit to the fund in time for the 15 March deadline, Cinven requested that the fundraising period be extended to allow new LPs more time to commit. The latest investments have increased the fund's total size by a further €300m. Fund V is now fully deployed from a primary platform perspective.

Investments
To date, Cinven has invested in 120 companies with a typical holding period of four to six years and with transactions valued in excess of €70bn. There are currently 23 companies in its portfolio and, as of 30 September 2017, the GP had €14bn in assets under management.

Cinven's investment activity

The GP invests in Europe-focused companies that require an equity investment of €200m and above. There is a five-sector focus; business services, consumer, financial services, healthcare and industrials. Its portfolio consists of CPA Global, HotelBeds Group, Pronet and Tinsan in the business services space; Allegro and Kurt Geiger in the consumer sector; Ergo Italia, Just Group, Premium Credit, New day and Viridian in financial services; Amco, Bioclinica, Medplace and Synlab in healthcare; CeramTec, Jost, Tractel and Chryso in industrials; and Allegro, Northgate, Ufinet and Visma in the TMT space.

Cinven can also invest selectively in businesses in North America – with a typical focus on healthcare and TMT due to their global nature. Examples include a contract research organisation Medpace, acquired in April 2014, and clinical trial services and tech company Bioclinica, acquired in October 2016. While headquartered in the US, both companies have global operations.

Cinven's investment activity by sector

Over the summer, Cinven sold intellectual property company CPA Global to Leonard Green and generated a 3x money multiple, €1bn capital gain for investors and 24% IRR. Other recent exit multiples include 4.2x money on Guardian Financial Services; 159% IRR over 11 years and 4.7x money on Numbericable; 2.3x cost for Avolon and 1.8x cost on Spire.

Some of the recent exits were to strategic buyers including HEG to GoDaddy; Prezioso to Altrad; Guardian Financial Services to Admin Re; and Avolon to Bohai Leasing (following its NYSE IPO).

Cinven's exit volume

Co-investment
Although the GP's preference is as a sole control investor, it has responded to LP appetite, with co-investments taking place in Hotelbeds, where CPPIB invested alongside the GP; and Synlab, where OTPP acquired a minority stake in the business (then operating independently as Labco and Synlab) in October 2015. Novo was subsequently brought in as an additional investor in Synlab. 

Key People

• Hugh Langmuir, executive chairman, was appointed to the role in 2015 after joining Cinven in 1991. He was managing partner from 2009-2015 and formerly managed Cinven's Paris office from 2001-2006. Before joining Cinven, he worked at Bain & Company and Citigroup in London and Paris.

• Stuart McAlpine, managing partner, joined Cinven in 1996. He was made a partner in 2003, joining the executive committee in 2007 and the investment committee in 2009. Prior to joining Cinven, he worked in the leveraged finance group within the Royal Bank of Scotland and previously at EY in Boston and London.

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