CVC Capital Partners

CVC Capital Partners

Type	Private
Industry	Private equity
Founded	1981; 40 years ago (1981)
Headquarters	Headquarters Luxembourg, Main Office London[1]
Key people	Steve Koltes, Donald Mackenzie, Rolly van Rappard
Products	Private equity, venture capital, credit asset management
Services	Investment Banking & Brokerage Diversified Financial Services
Total assets	US$75 billion [2]

CVC Capital Partners is a private equity and investment advisory firm with approximately US$111 billion in secured commitments since inception across European and Asian private equity, credit and growth funds. As of 2019, CVC managed US$75 billion of assets,^[2] the funds managed or advised by CVC are invested in 73 companies worldwide, employing over 300,000 people in numerous countries.^[3] Since 1981, CVC has completed over 500,000 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 founded in 1981 as the European arm of Citicorp Venture Capital.

Among Citicorp Venture Capital's early employees and in Europe were Jon Moulton, Mike Smith, and Frank Neale. Of the group's original European leadership, most would leave by the late 1980s. Moulton left the firm to co-found Schroder Ventures, the predecessor of Permira, in 1985. Neale also departed to form Phildrew Ventures.

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.^[4] 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.

History of private equity and venture capital
Early history
(origins of modern private equity)
The 1980s
(leveraged buyout boom)
The 1990s
(leveraged buyout and the venture capital bubble)
The 2000s
(dot-com bubble to the credit crunch)
v t

2000s[]

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^[5] Also, around the same time, CVC expanded into Asia with a $750 million fund focusing exclusively on investments in Asian companies.

From November 2005 to March 2006, CVC gradually purchased 63.4% of the shares of the Formula One Group, owner of the Formula One auto racing championship.

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.^[6]

2010s[]

In 2012, CVC reduced its shares in the Formula One Group to 35.5%. The deputy team principal of Force India, Bob Fernley, accused CVC of "raping the sport" during the period of its involvement in Formula One.^[7]

In January 2013, Smith retired from the role of chairman and Koltes, Mackenzie and Van Rappard were appointed co-chairmen of the group.^[8]

In February 2015, CVC made its first investment from CVC Growth Partners in Wireless Logic, Europe's largest machine-to-machine managed service provider, acquiring it from ECI Partners^[9]

In March 2015, CVC bought 80% of shares of gambling company Sky Betting & Gaming.

In June 2015, CVC acquired the German perfume retailer Douglas AG for an disclosed fee from private equity firm Advent International.^[10]

In September 2015, CVC opened an office in Warsaw.^[11]

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.^[12]

In April 2016, CVC Capital Partners acquired German betting operator Tipico.^[13]

In August 2016, CVC Capital Partners agreed to buy a 15% stake in PT Siloam International Hospitals TbK, among Indonesia's and South East Asia's largest corporate chains of hospitals ^[14]

In September 2016, CVC Capital Partners agreed to sell control of the Formula One Group to John Malone’s Liberty Media in a deal worth US$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.^[15]

Towards the end of 2019 CVC Capital Partners purchased Ontic from BBA Aviation for $1.365 billion.

Investment funds[]

Notable Investments[]

• AlixPartners: Management Consulting Firm
• Avast: IT security company;^[20]
• Breitling SA: Swiss luxury watchmaker
• RAC: automotive rescue service provider in the UK;^[21]
• Cortefiel: apparel retailers in Spain;
• PKP Energetyka: Polish railway network electricity distributor;
• Petco Holdings Inc.: major pet supplies retail chain;^[22]
• Magnum Corporation: Malaysian lottery operator.
• : One of the biggest legal services companies in the world.

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.^[23]

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 is the largest shareholder in pharmaceutical company Alvogen.^[24] In March 2021, their representatives on Alvogen's board led an internal investigation into allegations of abuse and bullying behavior against CEO Robert Wessman. The investigation highlights rising attention to conduct by corporate leaders in their dealings with colleagues and employees.^[25]

References[]

External links[]

• CVC Capital Partners