Asia, Middle East investor group buys 10% stake in CVC
A group of investors has purchased a 10% stake in CVC Capital Partners as the private equity firm seeks to deepen ties with existing LPs, potentially making it easier to raise capital for future funds. It follows moves by TPG Capital and Apax Partners to sell minority interests in themselves to sovereign wealth funds.
The group buying into CVC comprises two Asia sovereign funds and another from the Middle East, Bloomberg reported. The value of the stake is unknown.
CVC is preparing to raise a new global buyout fund that could be as large as its previous EUR10.8 billion ($14 billion) vehicle, which closed in 2008. Investors in the GP can expect a share of the management fees and carried interest generated by this and other funds, as well as getting right of first refusal on co-investments alongside funds.
CVC is also said to be looking to expand beyond the buyout space and into areas such as infrastructure, real assets and credit. Taking on investors might help raise capital for these new ventures.
Several private equity firms - KKR, The Carlyle Group, The Blackstone Group, Apollo Global Management and Oaktree Capital - have gone public in order to open up new capital-raising channels and allow founders to monetize a portion of their holdings. Selling stakes in the GP to private investors is another option.
Last year TPG reportedly sold a 4.5% stake to Government of Singapore Investment Corporation (GIC) and Kuwait Investment Authority (KIA) to support geographical and product expansion.
Two years earlier, GIC, Australia's Future Fund and China Investment Corporation (CIC) took a 10% interest in Apax. In addition to picking up a stake in the GP, CIC also agreed to acquire rights to a portion of undrawn commitments to Apax's 2007 vintage buyout fund.
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