CVC hits €21.3bn close for eighth buyout fund

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

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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