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CVC Raises Record Euro Buyout Fund at Its Fastest Pace Ever

Private-equity firms have a record $881 billion of dry powder to invest, up from $674 billion in December 2008, Preqin data show.

  • Alicia McElhaney

CVC Capital Partners has closed a €16 billion (about $18 billion) buyout fund, raising the largest European private-equity pool ever in just five months.

The firm received €15.5 billion of commitments from outside investors for its seventh private-equity fund, contributing €500 million from its own coffers, according to a CVC statement Thursday. CVC Capital Partners VII surpassed the €11.2 billion pool that Apax Partners closed in March 2008 to become the largest ever European-based private-equity fund, according to Preqin data.

“This demonstrates once again the increased capital concentration seen in the private equity industry, with a small group of experienced fund managers able to raise ever-larger vehicles quickly and successfully,” Christopher Elvin, Preqin’s head of private equity products, said in an email.

CVC's fundraising underscores a growing investor appetite for private equity. Its new pool closed quickly, exceeding what Apax was able to raise before the collapse of Lehman Brothers Holdings in September 2008, a monumental failure during a global financial crisis that had hurt private-equity portfolios and curbed many firms’ ability to attract fresh capital for buyouts.

Luxembourg-based CVC completed fundraising in five months, its fastest pace ever, attracting €25 billion to €30 billion before turning down some investors due to its hard cap of €15.5 billion, according to the person familiar with the effort. The firm will begin deploying capital from the new pool by January, expecting to invest €3 billion and €4 billion a year throughout Europe and the U.S. over a five-year period, the person said.

CVC, which has teams dedicated to healthcare, technology, media, telecom and financial services, still has about 20 percent of its sixth fund to deploy, said the person. The fund closed in 2013 at €10.9 billion.

Private-equity firms have a record $881 billion of dry powder to invest, up from $674 billion in December 2008, Preqin data show.

Fundraising by private equity firms has been on the rise globally over the past five years.

During the first quarter, 44 buyout funds raised a total $54.4 billion, compared with 47 firms raising $50.1 billion during the same period last year, according to Preqin. The global quarterly volume has tripled from $18.3 billion raised by 27 firms in the first three months of 2012.

Even with the increasing interest in private-equity, Blackstone Group’s 2006 buyout fund remains the biggest ever raised at about $20.4 billion.