
CVC hits €21.3bn close for eighth buyout fund
CVC Capital Partners has closed its eighth buyout mega-fund on €21.3bn, Unquote understands.
The fund, which was launched at the beginning of the year, has surpassed its initial target of €17.5bn.
The CVC investment team for Fund VIII consists of 109 investment professionals in Europe and the Americas.
The GP commitment is currently set at 3%. The management fee is set at 1.425% of total commitment during the investment period, lowering to 1.25% of unreturned cost after the investment period. Carry is set at 20%, but CVC opted for a lower hurdle rate of 6% (compared to the industry standard 8%).
The fund is larger then its predecessor, CVC Capital Partners VII, which closed on its €15.5bn hard-cap in mid-2017. The fund originally targeted €12.5bn.
CVC VIII is the largest European buyout fund ever raised, according to Unquote Data:
Top 10 largest European PE funds
Fund | Manager | Country | Vintage | Amount raised (€m) |
CVC Capital Partners VIII | CVC Capital Partners | United Kingdom | 2020 | 21300 |
CVC Capital Partners VII | CVC Capital Partners | United Kingdom | 2017 | 15500 |
Advent International GPE IX | Advent International | United Kingdom | 2019 | 15445 |
Advent International GPE VIII | Advent International | United Kingdom | 2016 | 11589 |
Apax Europe VII | Apax Partners | United Kingdom | 2007 | 11200 |
Permira VII | Permira | United Kingdom | 2019 | 11000 |
Permira IV | Permira | United Kingdom | 2006 | 11000 |
CVC Capital Partners VI | CVC Capital Partners | United Kingdom | 2013 | 10907 |
EQT VIII | EQT | Sweden | 2017 | 10750 |
CVC European Equity Partners V | CVC Capital Partners | United Kingdom | 2008 | 10749 |
Source: Unquote Data
The firm has raised significant amounts of capital across various strategies this year, most recently securing total commitments of $657m for its second US-focused direct lending fund, CVC Credit Partners US Direct Lending Fund II, in excess of its $500m target.
It also closed its fifth-generation Asia-Pacific fund on $4.5bn last April. The fund had a target of $4bn, while the fund's predecessor closed on $3.5bn.
CVC also closed its second growth vehicle, CVC Growth Partners Fund II, on $1.6bn (including a sidecar co-investment vehicle) at the end of last year. Launched in August 2018 with a $1bn target, the fund held a first close in August 2019 on $1.048bn. The vehicle targets mid-market technology businesses and intends to pursue the same investment strategy as its predecessor, CVC Growth Partners Fund I, which closed on $1bn in February 2016.
Investors
The vehicle attracted a number of large US institutional investors in the last few months, with commitments of €50-100m.
The board of the Pennsylvania State Employees' Retirement System (SERS) notably approved a follow-on commitment of up to €50m to the vehicle in a meeting on 21 April.
The investment division of the state of New Jersey proposed an investment of up to €100m in the fund to the State Investment Council, according to a document seen by Unquote.
Last March, Hamilton Lane told the Teachers' Retirement System of Louisiana that it planned to commit up to €70m to CVC VIII on behalf of the pension fund.
Investments
The fund targets North American and European companies. It would typically invest in 30-40 companies in its lifetime, with enterprise values of around €1-5bn. Equity ticket sizes would be in the range of €200m-1bn.
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