CVC Capital Partners

CVC Capital Partners
Private
Industry Private equity
Founded 1981
Headquarters Luxembourg
Key people
 Steve Koltes, Donald Mackenzie, Rolly van Rappard
Products Private equity, venture capital, credit asset management
Website www.cvc.com

CVC Capital Partners is a private equity firm with approximately US$80 billion in secured commitments across European and Asian private equity, credit and growth funds. In total, the CVC Group manages over US$52 billion of assets. Since 1981, CVC has completed over 300 investments across a wide range of industries and countries. CVC was founded in 1981 and today has over 400 employees working across its network of 24 offices throughout Europe, Asia and the Americas.

History

Founding

American banking giant, Citicorp, had established an investment arm in 1968 to focus on venture capital investments. By the late 1970s and early 1980s, Citicorp Venture Capital, at that time under the leadership of chairman William T. Comfort, continued to invest in early-stage businesses but also expanded into the emerging leveraged buyout business. CVC Capital Partners was originally founded in 1981 as the European arm of Citicorp Venture Capital.

Among Citicorp Venture Capital's early managing directors in Europe were John Botts, Otto Van der Wyck, Jon Moulton and Frank Neale. Of the group's original European leadership, most would leave by the late 1980s. Botts left in 1987 to found his own boutique investment banking firm, Botts & Company. Moulton left the bank to co-found Schroder Ventures (the predecessor of Permira) in 1985. The following year, Van der Wyck left to co-found European private equity firm BC Partners in 1986 and today serves as chairman of AlpInvest and a senior advisor to Coller Capital. Neale also departed to join Phildrew Ventures, which subsequently became UBS Capital and later IRRfc.

Spinout from Citicorp and the 1990s

By the early 1990s, Michael Smith, who joined Citicorp in 1982, was leading Citicorp Venture Capital in Europe along with other managing directors Steven Koltes, Hardy McLain, Donald Mackenzie, Iain Parham, and Rolly Van Rappard. In 1993, Smith and the senior investment professionals of Citicorp Venture Capital negotiated a spinout from Citibank to form an independent private equity firm, CVC Capital Partners.[1] In 2006, the US arm of Citigroup Venture Capital also spun out of the bank to form a new firm, known as Court Square Capital Partners. CVC operated offices in London, Paris and Frankfurt.

Following the spinout, CVC raised its first investment fund with $300 million of commitments, half coming from Citicorp and the rest from high-net-worth individuals and institutional investors. Now independent, CVC also completed its transition from venture capital investments to leveraged buyouts and investments in mature businesses. CVC would follow up with its second fund in 1996, its first fully independent of Citibank, with $840 million of capital commitments.

Since 2000

By 2000, CVC was one of the largest and best known private equity firms in Europe. In 2001, CVC completed fundraising for its third investment fund, which was the largest private equity fund raised in Europe at the time, just ahead of funds raised by other leading firms, Apax Partners and BC Partners[2] Also, around the same time, CVC expanded into Asia with a $750 million fund focusing exclusively on investments in Asian companies.

In 2007, CVC expanded to the U.S., opening an office in New York City, headed by Christopher Stadler and overseen by Rolly van Rappard.[3]

Since 2010

In January 2013, Smith retired from the role of chairman and Koltes, Mackenzie and Van Rappard were appointed co-chairmen of the group.[4]

In June 2015, CVC acquired the German perfume retailer Douglas AG for an disclosed fee from US private equity firm Advent International.[5]

In September 2015, CVC opened an office in Warsaw.[6]

In November 2015, CVC and the Canada Pension Plan Investment Board both acquired American pet supplier Petco for a fee of around $4.6 billion.[7]

In April 2016, CVC Capital Partners acquired German betting operator Tipico.[8]

In September 2016, CVC Capital Partners agreed to sell control of Formula One to John Malone’s Liberty Media in a deal worth $4.4bn. The two-part deal would see the US media group buy 18.7 per cent of the F1 parent company Delta Topco for $746mn in cash from a consortium of shareholders led by CVC. In 2017, a second payment of $354mn in cash and $3.3bn in newly issued shares in a Liberty Media tracking stock will see Liberty Media assume full control of Formula One once the deal is approved by regulators, the FIA and Liberty’s shareholders.[9]

Investment funds

Fund[10] Year Region Size (millions)
CVC European Equity Partners I 1996 Europe $840
CVC European Equity Partners II 1998 Europe $3,333
CVC Asia Fund I 2000 Asia $750
CVC European Equity Partners III[3] 2001 Europe $3,971
CVC European Equity Partners IV[11] 2005 Europe €6,000
CVC Capital Partners Asia Pacific II 2005 Asia $1,975
CVC European Equity Partners Tandem Fund 2007 Europe €4,123
CVC European Equity Partners V 2008 Europe €10,750
CVC Capital Partners Asia Pacific III 2008 Asia $4,120
CVC Capital Partners Asia Pacific IV 2014 Asia $3,495
CVC European Equity Partners VI 2014 Europe €10,907
CVC Growth Partners 2015 Europe $1,000

Investments

Europe and the United States

The current European and US portfolio contains a number of companies, including:

Asia-Pacific

The current Asia Pacific portfolio includes:

Controversies

In January 2015, CVC Capital Partners and Bencis Capital Partners were sentenced to pay fines by the Dutch Authority for Consumers and Markets after it charged the former Dutch portfolio company of the two firms, Meneba Beheer, with breaking competition rules through price fixing.[22]

The Dutch regulator ruled that the two firms must pay between €450,000 and €1.5 million after Meneba Beheer, which was itself fined €9 million by the authority, was involved in a collective agreement with competitors to keep prices stable between 2001 and 2007.

CVC's management of their majority holding in Formula One has been criticised by team owners for extracting billions of dollars in profits in the same manner as the Notorious Corporate Raiders of the 80’s, while giving nothing back to the sport.

References

  1. ↑ "Briton who has steered CVC to the top". The Times. February 23, 2007.
  2. ↑ "CVC Capital Partners closes record €4.65bn European fund". AltAssets. June 28, 2001.
  3. 1 2 "CVC sets up in US". AltAssets. January 31, 2007.
  4. ↑ "CVC chairman Michael Smith steps down after 30 years". Retrieved 2016-09-05.
  5. ↑ Kirsti Knolle (1 June 2015). "CVC buys German perfume retailer Douglas". Reuters. Retrieved 1 June 2015.
  6. ↑ "CVC opens Warsaw office, hires Krawczyk from Innova". AltAssets. 17 September 2015.
  7. ↑ "CVC, Canada's CPPIB to buy Petco for about $4.6 billion". Reuters. 23 November 2015.
  8. ↑ Langworth, Hannah (25 April 2016). "CVC acquires German betting operator Tipico". Real Deals.
  9. ↑ "US media firm Liberty Media to buy Formula 1". BBC News. Retrieved 2016-09-08.
  10. ↑ "Preqin Online Database". Preqin. September 05, 2016.
  11. ↑ "Pan-European CVC closes €6bn European fund". AltAssets. July 29, 2005.
  12. ↑ Lunden, Ingrid. "Security Software Firm Avast Gets CVC Capital Investment, Now Valued At $1B". TechCrunch. Retrieved 2016-09-05.
  13. ↑ Kleinman, Mark (December 2, 2015). "F1 Shareholder CVC Motors To £2bn RAC Deal". Sky News. Retrieved December 3, 2015.
  14. ↑ Driebusch, Telis Demos And Corrie. "Forget Going Public, U.S. Companies Want to Get Bought". Wall Street Journal. ISSN 0099-9660. Retrieved 2015-11-29.
  15. ↑ "Sky sells betting business to CVC private equity". Retrieved 2016-09-05.
  16. ↑ "CVC Capital Partners' Growth Fund makes USD80m investment in Kount Inc". Private Equity Wire. 2015-12-16. Retrieved 2016-09-05.
  17. ↑ "CVC Capital Partners to buy Stage Entertainment | News | The Stage". 2015-06-19. Retrieved 2016-09-05.
  18. ↑ "CVC Capital to focus on consumer, retail companies in Japan". Reuters. 2014-12-15. Retrieved 2016-09-05.
  19. ↑ "CVC agrees to buy S.Korea KFC franchise for $98 mln". Reuters. 2014-05-08. Retrieved 2016-09-05.
  20. ↑ Chan, Cathy. "CVC Acquires Hong Kong Serviced Offices After Closing Asia Fund". Bloomberg.com. Retrieved 2016-09-05.
  21. ↑ "CVC Capital Partners acquires stake in PT Softex". Private Equity Wire. 2015-12-23. Retrieved 2016-09-05.
  22. ↑ "ACM fines investment companies for cartel activities of portfolio company". www.elexica.com. Retrieved 2016-09-05.

External links

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