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CVC looks at €11bn fund despite crunch

CVC Capital Partners, the global buyout firm, is consulting investors for its latest fundraising effort while its chairman Michael Smith has reportedly said limited partners as long-term investors are not driven by short-term problems.

Global buyout firm CVC Capital Partners is consulting investors about plans for a greater than €11 billion ($16 billion) European fund, according to a source close to the company.

Michael Smith:
CVC chairman

The firm is also approaching a first close for an Asia fund in excess of $4 billion (€2.75 billion) after terminating its joint venture with US bank Citi, a partner on its two previous Asia funds, the source said.

Rival buyout firm Apax Partners is approaching its final close for a similarly sized circa €11 billion fund which is expected to break Permira’s €11.1 billion record European fund.

CVC’s fundraising plans have made little concession to changed market conditions in the wake of the liquidity problems in the global credit markets.

Michael Smith, the CVC chairman told UK newspaper Financial Times: “While limited partners are cognisant of the market upheaval, what we have seen with a number of investors is that they are obviously in this for the long-term and when they are in this for seven to eight years they are not driven by the short-term climate.”

Earlier this week, CVC launched a $2 billion infrastructure fund recruiting Stephen Vineburg as chief executive from Colonial First State Global Asset Management, the investment management arm of Commonwealth Bank of Australia.

CVC’s last fund raised €6 billion in 2005 which was subsequently bolstered by a €4 billion bolt-on fundraising effort last year.