CVC Said to Begin Raising Record European Buyout Fund in 2017

  • London-based firm said to plan to raise at least $14 billion
  • Firm owns stakes in Formula One Racing, Douglas retail chain

CVC Capital Partners, the U.K.’s largest private equity firm by assets, is in early talks with investors about raising a record amount for a European buyout fund, said people familiar with the matter.

The London-based buyout firm has held preliminary talks with backers about raising its seventh pool in the first half of 2017 with a target of 12.5 billion euros ($14.1 billion) and a cap of 15 billion euros, said the people, who asked not to be identified because the information is private. No final decisions have been made and the target may change, the people said.

Should CVC be successful in its efforts, it would be the largest buyout fund raised by a European-based manager, surpassing the 11.2 billion euros raised by Apax Partners for its seventh pool in 2007, according to data compiled by Bloomberg. CVC’s sixth pool, for which it raised 10.9 billion euros in 2013, is now 50 percent invested and expected to reach the 70 percent mark -- the threshold at which firms begin raising a successor fund -- by the end of the year, the people said.

Potential investors wanted to start talks early to prepare their allocation for the latest fund, the people said. CVC’s sixth fund was raised in six months, leaving several large investors out because they couldn’t organize commitments in that short a time.

CVC will be the last of Europe’s buyout firms known as the “big five” to raise money in the current fundraising cycle. Cinven is in the process of closing its sixth pool at 7 billion euros, above its target, according to someone familiar with the matter. Apax Partners, BC Partners and Permira are all currently in the market, people familiar with those firms have said.

The firm, which owns controlling stakes in Formula One Management and German retailer Douglas Holding AG, was founded in 1993 and is run by co-chairman Steve Koltes, Rolly Van Rappard and Alexander Donald Mackenzie. The company has grown in recent years, opening offices in San Francisco and Brazil, while expanding its New York team with hires in the industrial and technology sectors.

CVC’s 2009 fund, which closed on 10.7 billion euros, was generating a return of 10.9 percent as of 29 February 2016, according to data compiled by Bloomberg.

A spokesman for CVC declined to comment.

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