CVC Capital Nears Stake Sale to Blue Owl at $15 Billion Valuation

(Bloomberg) -- CVC Capital Partners is nearing a deal to sell a minority stake to investment firm Blue Owl Capital Inc. in a transaction valuing the European buyout firm at around $15 billion, people familiar with the matter said.

The private equity firm could reach an agreement on a stake sale of about 10% in the coming weeks, said the people, asking not to be identified because discussions are private.   

CVC, which was founded in 1981 and is controlled by its current and former managers, could use the money to continue expanding its business. The firm is in advanced talks to buy secondary buyout specialist Glendower Capital, people familiar with the matter said last month.

A fresh investor and the acquisition add to growing signs that CVC could be paving the way for a future initial public offering, the people said. The buyout firm has been informally discussing the idea after the successful listings of Bridgepoint Group Plc and EQT AB, though no decision has been made, Bloomberg News reported earlier this month.

A valuation of $15 billion may leave room for upside if CVC decides to pursue a listing. European rival EQT has risen more than sixfold since its IPO in September 2019 and now has a market value of $49 billion. Bridgepoint is up 43% since listing in July, the largest of a U.K. private equity firm in decades, valuing it at $5.6 billion.

Blue Owl

Blue Owl was formed earlier this year after investing giants Owl Rock Capital and Dyal Capital Partners merged and went public though a deal with a blank-check company. The company, which had $52.5 billion in assets under management as of March 31, already owns stakes in buyout firms including Silver Lake and Robert Smith’s Vista Equity Partners.

CVC has brought on outside investors before, a move which helps founders monetize their holdings. In 2012, sovereign wealth funds including Singapore’s GIC and the Kuwait Investment Authority acquired a 10% stake.

Private Equity International previously reported that CVC was considering a stake sale and holding talks with several GP stake managers, including Blue Owl. Representatives for CVC and Blue Owl declined to comment.

Unlike in the U.S., where firms like Blackstone Inc. and KKR & Co. went public more than a decade ago, European buyout groups have tended to remain private partnerships still dominated by their founders or immediate successors.

Stable Revenue

More European buyout firms are eyeing the public markets as a record amount of money continues to pour into the private equity industry, boosting the recurring revenue streams generated from management fees. That’s increasingly important amid rising asset valuations and the potential for higher rates to impact returns.

CVC oversaw about $163 billion in committed capital at the end of March, according to its website, having raised a record buyout fund a year ago. In addition to buyouts, CVC also has a credit unit, a growth investment arm and a direct lending team that makes loans to companies.

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