CVC prepares to launch IPO as early as next week

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CVC is preparing to announce its intention to float in Amsterdam as soon as next week in a mood-defying move by Europe’s largest private equity group.

The firm, which has €161bn under management, was valued at €15bn in a private transaction in 2021. It intends to sell shares in an entity that will receive its management fees, as well as part of its carried interest — the share of gains it gets when exiting profitable investments, according to two people with direct knowledge of the plans.

The listing would enable CVC shareholders — including Singapore’s GIC, the Kuwait Investment Authority, the Hong Kong Monetary Authority and US asset manager Blue Owl Capital — to sell down their stakes.

CVC declined to comment.

The plans come at a time of heightened geopolitical uncertainty, and just as rising interest rates are bringing an end to a more than decade-long boom in leveraged buyouts.

Companies including French software group Planisware, German military contractor Renk and CVC-owned DKV Mobility this month shelved listing plans because of weak investor demand. Shares in German shoemaker Birkenstock, which listed in New York this month, have fallen.

The timing of a CVC listing is not finalised and could be adjusted if the conflict in the Middle East were to escalate, the people said. However, the fund manager, which postponed its IPO last year in the wake of Russia’s full-scale invasion of Ukraine, is more determined to go ahead this time, they said.

CVC is likely to offer close to the minimum number of shares it is allowed to list under Dutch rules, they added. If the firm announces its intention to list on Monday, its shares could start trading next month, as per Euronext’s rules.

In 2021, Blue Owl’s Dyal Capital unit bought a stake in a deal that valued CVC at €15bn. Dyal is unlikely to sell its stake at the time of the IPO, two people with knowledge of the matter said, with one of the people adding that it could even buy more shares in the company. The other three investors bought in at a lower valuation more than a decade ago.

CVC is planning to list about 10 per cent of its shares, one of the people said. The Dutch system requires companies to have a free float of at least 25 per cent of subscribed capital, but the exchange can allow a lower percentage — as little as five per cent — in some circumstances.

In July CVC raised €26bn for leveraged buyouts, defying a weak market and breaking industry records. Over the years the firm has also diversified into private credit and other asset classes, following a path taken by the likes of Blackstone, KKR and Apollo Global Management, which listed their shares more than a decade ago.

In 2021, the group acquired Glendower Capital, a fund manager focused on buying stakes in private equity funds. This year CVC agreed to buy European infrastructure investor DIF Capital for about €1bn.

Additional reporting by Antoine Gara