RAC and Sky Bet owner CVC Capital closes Europe's largest ever private equity fund on more than €16bn

 
Lucy White
CVC Capital closes European record fund
CVC sold Formula One for an equity value of $4.4bn last year (Source: Getty)

CVC Capital, the owner of businesses such as RAC roadside assistance and Sky Bet gambling, has just closed the largest ever private equity fund raised in Europe.

At slightly over €16bn (£14bn), with €15.5bn collected from investors and the rest committed by the firm, CVC's seventh flagship fund dwarfs the previous record holder.

Apax Europe had held the title, with a comparatively small €11.2bn raised in 2008.

“We are honoured to have received such strong support from our investors across the world. We value greatly their continued trust in our ability to invest their capital well,” said CVC's co-chairman Steve Koltes.

The Luxembourg-headquartered firm will use the capital to buy equity stakes in businesses across Europe and North America, with the aim of increasing their profitability and selling them on to return money to investors.

One of CVC's deals which made the headlines last year was the sale of motor sport business Formula One, which passed to Liberty Media for an equity value of $4.4bn.

However, CVC may not hold the title of Europe's largest fund for long. Japanese bank Softbank is venturing into private equity with an ambitious fundraising, established from its London office.

The Softbank Vision Fund will invest in innovative tech companies and has already raised more than $93bn, making it the world's largest private equity fund. It aims to close at $100bn before the end of the year.

Although CVC has broken a European record, it has not quite exceeded the amounts raised by some of its US peers. Blackstone, the current world title holder, raised $22bn in 2008.

Investors currently have significant amounts of money which they are willing to give to private equity firms, as their investments have performed well and returned impressive amounts of capital since the financial crisis.

However, with so many cash-rich funds competing to buy companies for their portfolio, some players in the market are voicing concerns that the prices are too high and they risk making a loss when the time comes to sell.