Donald Mackenzie (right) attending qualifying for the 2015 Formula One Austrian Grand Prix with fellow billionaire Bernie Ecclestone (left).
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In the latest public offering amid a boom in European IPOs, private equity firm CVC Capital Partners is slated to go public on the Euronext Amsterdam on Friday. The firm published its prospectus on Monday, outlining a price range between $14 and $16 (€13 to €15) per share, and valuing the company from $14 billion to $16 billion. If the IPO hits the market at the midpoint of that range, the deal will also mint two new billionaires, cofounders Donald Mackenzie and Rolly van Rappard.
Mackenzie’s 6% stake after the IPO will be worth $890 million at that price. Mackenzie, who stepped down as co-chair of the firm on February 13 but is still on the board as honorary co-chair in a non-executive capacity, is also selling a chunk of shares worth $130 million (pretax) at the midpoint. That could grow by another $20 million if the company exercises its over-allotment option. Since CVC is based in the British crown dependency of Jersey, he likely won’t have to pay any capital gains tax on those sales. Combined with his reported ownership of the 171-foot superyacht Grace, worth an estimated $23 million according to VesselsValue, Forbes estimates the Scottish-born Mackenzie, 67, is worth at least $1 billion.
Van Rappard, the 63-year-old managing partner and remaining co-chair, on the other hand, isn’t selling any of his shares. His 6.7% stake will be worth $1 billion at the midpoint. Like Mackenzie, he also owns a yacht, the 184-foot Blue II, worth an estimated $32 million per VesselsValue. He owns 50% of the ship, with the other half held by fellow CVC cofounder Steve Koltes through his Jersey-based family office Kaltroco. The yacht can also navigate through sea ice in polar regions and features a sauna, steam room and turkish bath.
Born in the Caribbean island of Curaçao, the Dutch businessman—whose full name is Louis Rodolph Jules Ridder van Rappard—lives in London. His Luxembourg-based family office, Steflot, held $224 million in net book value as of its latest filing in December 2022, including investment firm Imker Capital. Altogether, Forbes estimates Van Rappard is worth at least $1.2 billion. Representatives for CVC declined to comment on the valuation.
Before the IPO, CVC will also pay out a $327 million (pretax) dividend to its shareholders—a payout that would translate to roughly $23 million each for Mackenzie and Rappard and $14 million for Koltes.
CVC was established in 1981 as the European operations of Citicorp Venture Capital, the VC arm of Citigroup. In 1993, Mackenzie, von Rappard, Koltes and five other cofounders (all of whom have since left the company) acquired the business and spun it out as CVC Capital Partners, going on to raise their first $630 million fund in 1996 and shifting their focus to private equity. CVC now has $198 billion in assets under management with offices in 29 cities across six continents. It’s best known for investments in sports, from its $2 billion leveraged buyout of the Formula 1 racing series in 2006—which it sold to publicly traded Liberty Media for $8 billion (enterprise value) in 2016—to its $2.1 billion deal with Spanish soccer league La Liga in 2021 for an 8.25% cut of TV rights over the next 50 years.
CVC’s holdings include pet food retailer Petco, which it bought alongside a Canadian pension fund for $4.6 billion in 2015; online university platform Multiversity, which it bought from Italian billionaire Danilo Iervolino in 2021; Swiss luxury watchmaker Breitling; plus other high-profile sports investments including the Women’s Tennis Association and Indian Premier League cricket team Gujarat Titans.
“When we founded CVC in the early 90s it was our ambition to create a multi-generational business that would continue to flourish long after the founders had gone,” Mackenzie said in a statement announcing his departure in February. “I believe we have achieved that. The business is in very good shape and in good hands.”
In 2023, CVC reported $1.2 billion in revenue, largely made up of $976 million in management fees, and EBITDA (earnings before interest, taxes, depreciation and amortization) of $692 million. While that was a 3.5% increase from 2022, it’s a lot smaller than asset management behemoths such as BlackRock and Blackstone, or even European peers like Swedish private equity firm EQT—all of which have annual revenues of at least $6 billion.
“They have a multi-pronged approach. They do private credit, providing credit opportunities for companies where they don’t necessarily want to take loans from banks. They also have pretty big infrastructure opportunities that they’re working on,” says Dean Kim, head of equity research at brokerage William O’Neil.
Infrastructure is a growing asset class for private equity, with BlackRock announcing a $12.5 billion deal to acquire infrastructure-focused Global Infrastructure Partners in January. Last September, CVC bought a 60% stake in Dutch infrastructure investment outfit DIF Capital Partners for an undisclosed amount.
CVC’s IPO could be dampened by heightened tensions in the Middle East and market pessimism about interest rate cuts in the U.S., which has dragged down the stock prices of BlackRock and Blackstone by 7% and 4%, respectively, over the past month. But in Europe, where the European Central Bank is expected to cut rates soon, there could be stronger growth for asset managers like CVC.
“European asset managers should do well in the long term because the ECB is on its way to cut rates,” adds Kim. “And when that happens, asset gathering becomes easier, there’s more liquidity in the market. Money has to go somewhere it can generate returns.”
The largest shareholder in CVC is publicly traded private equity firm Blue Owl Capital, which bought a 10% stake in several CVC subsidiaries for about $1.1 billion in November 2021. It currently holds an 8% stake that will be worth $1.2 billion at the midpoint price. The firm, which has minted two billionaires—Doug Ostrover and Michael Rees—since going public itself in 2021, will also buy more shares in the IPO for roughly $170 million, giving it a 9.1% stake after the transaction.
While not as wealthy as Mackenzie and van Rappard, Koltes—the only other cofounder who still has a role at CVC—will also see a significant boost to his net worth. His 4.2% stake after the IPO will be worth $620 million at the midpoint, plus roughly $30 million (pretax) from share sales, which could grow to $34 million with the over-allotment. The 68-year-old American stepped down as CVC’s co-chair in January 2022 and now serves as honorary co-chair alongside Mackenzie in a non-executive role. His family office, Kaltroco, has also invested in Mediterranean fast-casual restaurant chain Taim, auto industry M&A advisory firm Dave Cantin Group and German VC firm 468 Capital.
“CVC outgrew a dependence on any single individual or group of individuals long ago. The firm attracts, motivates and energizes a collection of talent second to none. For everything I can do well, there are dozens in the firm who can do it better,” Koltes said in a statement when he stepped down in January 2022.
Two longtime CVC executives, Rob Lucas and Javier de Jaime Guijarro, will keep all of their shares in the firm after the IPO. Their stakes will be worth $530 million and $520 million at the midpoint, respectively.
