CVC Capital Partners only started raising its ninth buyout fund in January and originally planned to raise €25bn. Demand was strong enough to surpass that figure, showing how more established private equity firms can have an edge at a time when investors are becoming more selective about where to invest their money.
Private equity firms have found their traditional leveraged buyout model constrained by higher interest rates. This makes it harder to close deals and generate windfall returns for investors, some of whom are also cutting fees to this asset class. This, in turn, hurt efforts to raise new capital.
CVC is one of the world's largest private equity firms, with approximately €140 billion under management. Founded in the 1980s by a group of venture capitalists including Steve Coltes, Donald Mackenzie and Rollie van Rappard, CVC is majority-owned by its employees.
Unlike large peers such as Apollo, Blackstone Inc. and Carlyle Group Inc. , CVC remains unlisted on the exchange. But the firm has been considering plans for an initial public offering and in 2021 agreed to buy secondary buyout specialist Glendower Capital in a deal that was seen as a way to diversify ahead of a possible IPO. The record fundraising could further bolster CVC's case for such a move.
Now the immediate challenge for the CVC will be to find ways to spend its new pool of capital. According to data compiled by Bloomberg, the value of private equity acquisitions has fallen by more than 50% to $263 billion in 2023.
This year, CVC closed deals to invest in Danish transport company Scan Global Logistics, Brazilian food distributor Delly's and the Women's Tennis Association.