European private equity firm, Cinven, today announces the final closing of its Fifth European Buyout Fund (‘the Fund’) with total commitments of €5 billion.

Key highlights:

  • Largest pool of capital currently dedicated exclusively for European buyouts;
  • Strong performance of prior funds: 41% gross IRR on 82 realised investments since 1988;
  • Realised value for investors of €5.0 billion since the start of 2011, including the sale of Avio’s aviation business;
  • Fund 5 is 14% committed following its investments in Pronet, Prezioso, Mercury Pharma and Amdipharm.

Consistent 25 year investment strategy
For over 25 years, Cinven has successfully identified and acquired attractive Europe-based businesses through its sector-focused, pan-European investment advisory team. The team has consistently demonstrated its ability to build global or regional leaders, with the support of its Portfolio teams in Europe and, more recently, in Asia, capitalising on Asian and emerging market growth opportunities. A dedicated Financing team works alongside the investment advisory team to optimise each company’s capital structure for growth. The Cinven team is strongly focused on value creation through top line growth with more than 75% of value creation across its realised portfolio generated from revenue-driven earnings growth. Since 1988, Cinven has generated €21.4 billion of realised value.

Investment track record
Cinven’s strong and consistent investment track record was a significant contribution to its successful fundraising, as well as its ability to remain focused on and demonstrate continued deal flow in Europe.

In 2012, Cinven completed six acquisitions, including four investments from Fund 5: Mercury Pharma and Amdipharm (healthcare), which have been merged post-acquisition as part of a planned buy-and-build strategy; Prezioso (business services) and Pronet (business services); its final Fund 4 investment in CPA Global (business services); and a significant add-on for an existing portfolio company (Guardian Financial Services). Since 1996, Cinven has completed more than 60 transactions across Europe with a combined enterprise value of around €70 billion.

Realisations
In 2012, Cinven achieved three successful realisations: the IPO of Ziggo, the Dutch cable business, on the NYSE Euronext Amsterdam with an initial market capitalisation of €3.7 billion; the agreed sale of Avio’s aviation business to GE for €3.3 billion; and the sale of Ahlsell, the distributor of construction products in the Nordic region, for €1.8 billion. These exits follow the successful realisations in 2011 of Amadeus, the global travel technology business, and Phadia, the in-vitro diagnostics business, which generated 7x and 3.4x respectively, both of which generated a capital gain of more than €1 billion.

Pro forma for the Avio aviation transaction, Cinven’s Fourth Fund will have realised approximately 55% of the paid-in capital which is one of the highest ratios of European funds of its vintage.

Hugh Langmuir, Managing Partner of Cinven Partners LLP, said:

“We are very pleased with the level of support from our investors. Our successful fundraising demonstrates the confidence they have in our abilities to continue finding attractive investment opportunities across Europe, despite the challenging macroeconomic environment. We have constantly stated that the Fifth Cinven Fund does not represent a ‘macro Europe’ investment opportunity but a ‘micro’ one – finding individual Europe-based companies with strong growth potential either globally or in their domestic markets.

“Our consistent strategy throughout the last 25 years has enabled us to generate strong returns and has also been highly attractive to LPs. We believe the size of our current fund is appropriate for the market opportunity and the level of deal flow we are currently seeing.”

Alexandra Hess, Partner of Cinven Partners LLP with responsibility for fundraising and IR, added:

“We have maintained a consistent investment strategy that plays to our experience and expertise in the European market; investors have welcomed this. Furthermore, in the last couple of years, we have continued to make new investments and realise assets at attractive returns – all against a challenging European back drop.

“We have continued to attract commitments from longstanding investors as well as bring in new investors. Our early investments in Fund 5 provided great visibility on the opportunities we see in the European market and our ability to execute on them. We continue to see both good deal flow as well as an exit pipeline.”