CVC Capital Partners (CVC), the European private equity firm, has decided to call a halt to its attempted move into core infrastructure which began with a debut fundraising attempt five years ago.
A source confirmed a report in Financial News indicating that the infrastructure effort had been abandoned. The infrastructure team, which had been led throughout its existence by former Colonial First State professional Stephen Vineburg, is being disbanded.
The source added that CVC would continue to explore infrastructure opportunities that offered private equity-type characteristics from within its private equity team but was withdrawing from its separate, ‘core’ infrastructure strategy.
The firm launched its debut infrastructure fund in 2009 with the aim of raising €2 billion. It reached a €200 million first close (plus a further €100 million in soft commitments) in 2012 with commitments from a small group of European, Canadian and Asian investors.
In the summer of last year, the fundraising was abandoned after failing to achieve sufficient scale. Sources suggested that, despite its €2 billion target, the firm would have seen €500 million as viable when considered together with co-investments.
The firm then said that it hoped to retain three “core investors” in order to pursue a “managed investment arrangement” that would see it provide tailored solutions to these limited partners. However, the latest announcement appears to indicate that this effort was unsuccessful.
CVC has invested in infrastructure from its private equity strategy – including buying 15.5 percent of Spanish developer Abertis as well as 25 hospitals in Spain – but was unable to close a deal from its infrastructure strategy before the fundraising was folded. It had been part of unsuccessful bids for UK water company Sutton & East Surrey Water and the UK water assets of French group Veolia Environnement.
In addition to Vineburg, the infrastructure team included the likes of Tony Clamp, Alex Nieberding and Frederic Devos.
Founded in 1981, CVC has secured over $50 billion in commitments and has around 300 investors. As well as its private equity business, it also has a private debt unit.