CVC IPO: Infrastructure secondaries and semi-liquid products top of mind

CVC Capital Partners has its eyes on infrastructure secondaries as an area of growth as it gears up to list on Euronext Amsterdam.

The Luxembourg-headquartered investment firm is also set to widen its LP base by tapping the wealth channel via the creation of “tailored products and solutions for US and European insurers and creating semi-liquid private equity, secondaries and credit products”, according to a prospectus published Monday morning.

The offering is expected to take place in the coming weeks. CVC reportedly aborted its IPO plans in November last year due to unfavourable market conditions.

The firm expects to raise a minimum of €1.25 billion via the IPO, which includes newly issued shares and the sale of shares by existing shareholders, with approximately €250 million of primary proceeds. It has approximately €186 billion of AUM across seven investment strategies spanning private equity, secondaries, credit and infrastructure.

CVC believes there are “inter-platform” opportunities to expand the firm further, with an infrastructure secondaries product listed as a prime example. The IPO will also give CVC the opportunity to expand its business lines geographically – for example, by extending its infrastructure, strategic opportunities and growth strategies into Asia, creating new platforms and pursuing other direct private markets adjacencies as it has done in secondaries and infrastructure, the prospectus detailed.

CVC, which agreed to merge with Glendower Capital in 2021, has approximately €13 billion of secondaries AUM, according to the prospectus. Glendower raised more than $5 billion for Glendower Secondary Opportunities Fund V last year – more than its initial $4.5 billion hard-cap and $3.5 billion target, Secondaries Investor reported.

CVC is the third-largest PE firm headquartered in Europe and 15th-largest globally according to the PEI 300. It hauled in €26 billion for the industry’s largest-ever fund last year. The fund’s predecessor, CVC Capital Partners VIII, closed in 2020 on €22.3 billion and is 55.98 percent called as of September, according to documents prepared by the New York City Police Pension Fund. The fund has generated an IRR of 9.3 percent and TVPI of 1.09x.

Energy and infrastructure assets made up 6 percent of the $113 billion of secondaries deal volume seen in the secondaries market last year, according to a report from Evercore.