The four largest private equity firms headquartered in London, as ranked by total assets under management, or AUM, are CVC Capital Partners Ltd., BC Partners, Bridgepoint Capital Group and Cinven Group, Ltd.
Private Equity Firms
Private equity firms provide investment capital and investment management services. Such firms raise investment capital from individuals and institutional investors, such as pension funds, to fund equity investments in companies either through direct purchase of an equity stake in private companies or through leveraged buyouts, or LBO, of publicly traded companies. Private equity firms often obtain an equity interest by providing venture capital, sometimes in partnership with other private equity firms.
Once it acquires a controlling interest in a company, a private equity firm then directs the management of the acquired company with the ultimate goal of substantially increasing the company’s value so it can be sold for a profit. Private equity firms often specialize in investments in particular industries or market sectors. A private equity firm’s portfolio is composed of companies it has acquired or in which it holds a substantial equity interest. The investment horizon for most private equity firm investments is five to 10 years.
CVC Capital Partners Ltd.
Founded in 1981, originally as an investment division of Citigroup, CVC Capital Partners Ltd. subsequently managed its own LBO. It has over $80 billion in AUM, making it the largest private equity firm based in London, and one of the 10 largest private equity firms worldwide.
CVC Capital engages in a broad range of private equity investing, including venture capital investments, leveraged buyouts, recapitalization and acquisitions. The firm invests primarily in large-or medium-sized companies engaged in market sectors that include technology, telecommunications, financial services, health care, energy and the industrial sector. CVC also makes investments in infrastructure in Europe, such as public utilities and transportation.
Primary geographical focuses for CVC’s investments, in addition to Europe, are North America, the Middle East, Asia, specifically Hong Kong and Singapore, and Australia. Within continental Europe, CVC Capital maintains its largest investments in Germany, France and Switzerland, with a target minimum investment for European funds of $150 million.
CVC Capital’s average investment is between $200 million and $2 billion. Its typical investment target is a company with an enterprise value between $400 million and $15 billion with annual revenues in excess of $250 million. CVC usually holds an investment for a minimum of five years. It prefers to have a seat on the board of directors of the companies in its portfolio.
CVC Capital also operates a private debt firm, CVC Credit Partners, that invests in debt securities of companies principally owned by private equity funds. As of August 2015, CVC’s portfolio is made up of more than 50 companies, with large interests in retail, service and manufacturing businesses. Some of its portfolio holdings include BJ’s Wholesale club, Hong Kong Broadband Network, Skrill and Samsonite. CVC Capital Partners operates globally, with approximately 20 offices spread throughout Europe, the United States and Asia.
BC Partners was founded in London in 1986. The company has approximately $38 billion worth of AUM. BC Partners operates worldwide but typically invests in companies that have a substantial European presence. Within the continent, the company concentrates its investments in France, Germany, Spain and the Scandinavian countries. Outside of the continent of Europe, its principal portfolio holdings are in its home country, the U.K. or in the U.S. The firm prefers making investments of $50 million or more in companies with enterprise values greater than $200 million. BC is noted as a leader in leveraged buyouts in Europe and has completed nearly 100 acquisitions since its inception.
BC aims to have a seat on the board and hold a majority equity stake in its portfolio companies. Portfolio holdings include Intelsat, PetSmart, Synlab, Mergermarket Group and Gruppo Coin, the largest clothing retailer in Italy.
The investor base for BC Partners is composed of more than 150 institutional investors, including pension and sovereign wealth funds. BC Partners is noted for its efficiency of operation, employing only about 50 to 100 investment professionals for every 500 employed by firms it regularly competes with, such as CVC Capital Partners and Bain Capital. Besides its London base, the firm has additional offices in New York, Paris and Hamburg.
Bridgepoint Capital Group
Bridgepoint Capital Group was founded in 1984 and is the third largest private equity firm based in London, with approximately $25 billion in AUM. Bridgepoint states it aims to be a bridge between buyouts and successful, long-term growth for the companies in which it invests. The firm’s primary focus is on acquisition of majority equity interests in middle market European companies engaged in providing financial, consumer, business and health care services. Bridgepoint’s average investment ranges between $100 and $500 million in companies that are valued at between $300 million and $1.5 billion. Geographically, its investments are primarily located in the U.K. France, Germany, Italy, Turkey, China and Switzerland.
The Bridgepoint Capital investment portfolio is composed of almost 70 companies. It includes a diverse selection of businesses, with emphases on financial, health care and business services, and specialty retail concerns. Among Bridgepoint’s portfolio holdings are 1st Credit, Diners Club, the John Brown Media Group, CTL Logistics, Casino France Operations and sports apparel maker Fat Face. One of Bridgepoint’s notable accomplishments was acquiring, in 1999, a 50% share in 13 of London’s West End Theatres through its equity interest in Andrew Lloyd Webber’s Theatre Group.
Bridgepoint’s investor base includes pension funds, asset managers and insurance companies. A subsidiary of Bridgepoint Capital, Bridgepoint Development Capital, invests in small-cap companies valued at $200 million or less. In addition to its London headquarters office, Bridgepoint has offices in Frankfurt, Madrid, Istanbul and Shanghai.
Cinven Group, Ltd.
Cinven Group, Ltd. rounds out the list of the top four London-based private equity firms, with around $20 billion in AUM. Founded in 1977, Cinven’s original investor base consisted solely of three pension funds, among them that of Barclays Bank, which remains a primary investor in Cinven. The firm has more than 150 institutional investors, including sovereign wealth funds, insurance companies and foundations, located across 20 countries worldwide.
Cinven Group’s primary focus is on acquisitions and leveraged buyouts of companies based in Europe that require equity investments of at least $150 million. Its primary sectors of interest include technology, media and communications, industrial manufacturing, health care and business and financial services.
The firm maintains a portfolio of about 25 companies. Holdings include clothing retailer Camaieu, domain and hosting company HEG, life insurance firm Heidelberger Leben Group, health care service company Medpace and specialty pharmaceuticals firm AMCo. Cinven has offices in London, Paris, Frankfurt, Madrid, New York and Hong Kong.