Investor CVC makes a smashing debut in Amsterdam

The investment giant CVC listed on the Amsterdam stock exchange on Friday. Investors sent the newcomer almost 17 percent higher.

The introductory price for CVC was set on Friday at 14 euros, the middle of the proposed price range (13 to 15 euros). At opening, the share price of the private equity player – an investor in unlisted companies – was up to 23 percent higher, marking the largest Amsterdam IPO in years in good weather.

The issue of new shares generated 250 million euros for the company. In total, CVC raised 2.3 billion euros because existing shareholders, including the sovereign wealth funds of Singapore and Hong Kong, sold some of their shares. Due to strong demand for the shares – to which only institutional investors could subscribe – the total proceeds were 500 million euros higher than the company previously expected.

Blue Owl Capital, another listed US private equity player, bought 10 percent of the offered shares. Blue Owl also had an interest in CVC before the IPO.

An investment in CVC is an entry ticket to a major European private equity player, a company that invests in unlisted companies, with a more cautious risk profile. The latter follows from the fact that CVC deals with buyouts (established values) instead of venture capital (young companies that still have to prove themselves). In addition, the originally British company is a household name in the private equity sector on the old continent. It owns major brands such as Lipton and Breitling.

Through the newcomer, investors can anticipate a possible recovery of the sector, which – judging by the high discounts on the intrinsic value – is still in disarray. The strong valuation plays into the hands of the financial giant. “Investors are fleeing to household names and larger funds,” the consultant McKinsey previously noted.

Furthermore, CVC has a solid track record. Since its founding, it has been able to achieve a gross return of 28 percent per year. In addition, the group promises an attractive dividend. For the second half of 2024, it reserves almost half of the expected profit, an amount of 225 million euros, for the shareholders. The intention is to gradually increase the payment percentage.