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CVC, Europe’s largest private equity group, is preparing to make an announcement regarding its intention to launch an initial public offering (IPO) in Amsterdam. This unexpected move showcases the firm’s confidence despite prevailing market trends.
The privately owned group manages a massive €161 billion and was valued at €15 billion in a private transaction in 2021. According to insiders, CVC plans to sell shares in a new entity that will receive both management fees and a portion of its carried interest. Carried interest represents the share of gains obtained when exiting profitable investments.
The IPO will give CVC shareholders, which include Singapore’s GIC, the Kuwait Investment Authority, the Hong Kong Monetary Authority, and US asset manager Blue Owl Capital, an opportunity to sell their stakes in the company.
Although CVC has declined to comment on the matter, the listing comes at a time of heightened geopolitical uncertainty and rising interest rates that signal the end of a 10-year boom in leveraged buyouts.
Notably, other companies like Planisware, Renk, and DKV Mobility have recently shelved their plans to go public due to weak investor demand. Furthermore, the shares of Birkenstock, a German shoemaker that just listed in New York, have already fallen.
It is important to note that the timing of CVC’s IPO is subject to change in the event of escalating conflicts in the Middle East. However, insiders report that CVC is determined to proceed with the IPO this time, having postponed it last year following Russia’s invasion of Ukraine.
CVC is likely to offer the minimum number of shares allowed under Dutch rules. If the firm announces its intent to go public on Monday, trading could commence next month, according to Euronext’s guidelines.
In 2021, Dyal Capital, a unit of Blue Owl, invested in CVC, valuing the company at €15 billion. It is unlikely that Dyal will sell its stake during the IPO, and there is even a possibility of the unit acquiring more shares. The other three investors bought their stakes more than 10 years ago at a lower valuation.
CVC plans to list approximately 10% of its shares. The Dutch system mandates a minimum free float of 25% of subscribed capital, although the exchange can allow exceptions, permitting as little as 5% in certain circumstances.
CVC impressed the industry earlier this year by raising €26 billion for leveraged buyouts, breaking records during a weak market. The firm has diversified over time, venturing into private credit and various other asset classes. This strategic move follows the paths of Blackstone, KKR, and Apollo Global Management, who listed their shares more than a decade ago.
In addition, CVC acquired Glendower Capital, a fund manager specializing in buying stakes in private equity funds, in 2021. This year, the group agreed to purchase DIF Capital, a European infrastructure investor, for about €1 billion.
Additional reporting by Antoine Gara
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