CVC Capital Partners, a private equity firm, revives its listing plans

CVC Capital Partners is one of Europe’s largest buyout groups. According to sources familiar with the situation, the group has revived its plans to list on the stock exchange for several billion euros. This could happen before the year ends.

Last year, the secretive company, which owns PG Tips and bets heavily on Formula One and rugby, rescheduled its planned listing as markets plunged following Russia’s invasion of Ukraine.

The people stated that the conditions have improved due to a recent rebound on the markets and the company’s record €26bn purchase fund raised last month. They cautioned, however, that no final decisions have been made and the plan may still change.

A private equity IPO will be a test for investors’ confidence, given the end of the ultra-low rates of interest that propelled the industry to its current heights. CVC valued itself at €15bn in 2021 when it agreed on a sale of a minority stake by Blue Owl’s Dyal Capital division.

Bridgepoint, TPG, and Antin Infrastructure Partners went public during the boom years of the industry, when low-cost debt and high valuations of portfolio companies drove its revenues up. As rates have risen and the economy has slowed, some of CVC’s listed competitors’ shares have dropped.

CVC is committed to becoming a large financial institution that manages a wide range of assets. Its goal is to grow beyond its roots in Europe as a pioneer for highly leveraged corporate acquisitions.

Many of its Wall Street competitors, such as Blackstone, Apollo and others, now oversee sprawling Empires, where leveraged acquisitions are not their main business.

CVC, led by managing partner Rob Lucas has 25 offices in the world, and according to its site, manages €140bn of assets. CVC has expanded into private credit and acquired Glendower Capital in 2021, a secondary business that invests in buyout groups selling companies to themselves.

Two people familiar with the situation said that CVC intends to use part of the money raised from an IPO in order to purchase other asset management companies, including an investment firm specialised in infrastructure.

Last year, it was reported that CVC planned to list 10 percent of its company on the Amsterdam Stock Exchange.

CVC has declined to comment.

The group would be making a major change by becoming a publicly traded company. It has been a secrecy-loving organization for three decades, despite owning stakes in household brands such as UK retailer Debenhams.

CVC has developed a plan that will allow its employees to retain the majority or even the entire of a lucrative revenue source, the 20% share of profits from successful deals referred to as “carried interests”, even after the company is listed.

According to the plan, investors on the public markets would purchase shares in a vehicle which instead received the proceeds from its constant stream of management fees. The $26bn fund raise will provide investors with more certainty regarding future fees.

PwC data shows that the market for European listing has been subdued in 2018. Companies going public raised just €3.8bn during the first half of the year, a drop of 27 percent from the same period last year.