Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
European private equity group CVC Capital Partners has postponed plans to float until next year because of market turbulence, according to two people with direct knowledge of the decision.
The delay to CVC’s plans to list in Amsterdam extends a two-year saga over whether it will follow rivals on to the public markets. CVC previously postponed its move to list in the aftermath of Russia’s full-scale invasion of Ukraine last year.
Poor earnings results from publicly traded peers EQT and Blackstone in recent weeks, the uncertainty caused by conflict in the Middle East and concerns about the state of the wider economy all contributed to the decision to delay the initial public offering, the people said.
“You can’t defy gravity,” one of the people said. “Market conditions aren’t there.”
The decision was taken on Wednesday after a meeting of the firm’s senior leadership. Its investment bankers working on the deal, including Goldman Sachs and JPMorgan Chase, were also informed, the people added.
Postponing the IPO again is a blow to the firm, which manages €161bn in assets, as it seeks to keep pace with rivals including EQT, which used the proceeds from its own listing to expand through acquisitions.
Although there was optimism among bankers that the window for IPOs could be reopening, new offerings in Europe for the year so far are languishing at their lowest level since the financial crisis.
Companies including French software group Planisware and German military contractor Renk have delayed plans to float in recent weeks, citing a difficult market environment. In the US, shares in chip designer Arm, German sandal maker Birkenstock and tech group Instacart have fallen since their listings this year.
Private equity fund managers have come under pressure as higher interest rates have hit corporate valuations and made exiting investments and returning capital to investors more challenging.
In preparation for a listing, CVC has sought to increase and diversify assets under management in infrastructure and secondaries.
That strategy emulates larger US peers such as Blackstone and KKR, which have moved away from their leveraged buyout roots over the past decade.
In 2021, CVC acquired Glendower Capital, a firm specialising in buying private equity fund stakes. It bought a majority stake in Dutch infrastructure investor DIF Capital Partners this year in a deal worth about €1bn. The investment group has also been scaling up its assets under management in credit, a fast-growing asset class.
CVC remains committed to going public in the near future when market conditions improve, one of the people familiar with the matter said.
Read the full article here