CVC sets record with €12.1bn fund

CVC, led by chairman Michael Smith, has raised Europe’s largest-ever private equity fund in spite of credit market problems making larger buyouts difficult to achieve.

European buyout firm CVC Capital Partners, led by chairman Michael Smith, is set to close its latest fund above its €11 billion ($16.7 billion) target at €12.1 billion, according to a source close to the company, confirming a report in UK newspaper the Daily Telegraph

Michael Smith:
€12.1 billion fund

The fund will be closed imminently having reached its self-imposed cap, the source added.

The previous record for a European private equity fund was held by Permira, which closed an €11.1 billion vehicle in July 2006.

CVC’s previous fund closed on €6 billion in June 2005. The firm subsequently raised a €4 billion side-car fund to invest alongside the main fund in October 2006.

The latest fundraising is notable given the difficulties in the credit markets that surfaced last summer and which continue to reverberate. Banks have been unwilling to provide debt for mega-buyouts since then, and there are few signs as yet of the funding drought ending.

Despite this, the fundraising bandwagon appears to be rolling on. CVC rival Apax Partners is understood to be near the close of its latest fund, which is reported to targeting more than €11 billion.

In total, more than $615 billion (€911 billion) is in the process of being raised by private equity firms globally, according to research by placement agent Probitas Partners.

CVC’s own fundraising efforts continue, as it reportedly approaches a first close for an Asia fund in excess of $4 billion. The Asia fund is the first to be raised by CVC since it terminated its joint venture with banking group Citi, a partner on its two previous Asia funds, a source told PEO in December.