CVC co-founder Donald Mackenzie set to net up to €150mn in IPO

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The public listing of European private equity firm CVC Capital Partners will net one of its co-founders, Donald Mackenzie, a windfall of up to €150mn.

Mackenzie, who recently stepped back from the company he founded more than 30 years ago, is expected to sell either 8.7mn or 10mn shares in Friday’s initial public offering, according to a prospectus published by CVC on Monday.

If the shares are sold at the targeted value of between €13 and €15 a share, Mackenzie will receive a payout of between €113mn and €150mn.

Co-founder Steve Koltes will also sell about 2mn shares in the initial public offering, netting him a windfall in the tens of millions of euros, the prospectus shows. Institutional shareholders including the Hong Kong Monetary Authority, Kuwait Investment Authority and Singapore’s GIC are also planning to sell down their stakes in the business.

The share sale is part of a broader offering expected to be about €1.6bn, which will give CVC an implied market capitalisation of between €13bn and €15bn, the document states. Current employees, including co-founder Rolly Van Rappard, who is to become chair of the listed entity, and managing partner Rob Lucas, who is to be its chief executive, are not selling any shares.

The decision to announce pricing is the latest step towards a long-awaited IPO that was delayed twice by difficult market conditions, first caused by the war in Ukraine and then by the conflict in the Middle East. CVC announced its intention to float last week.

The IPO prospectus gives a rare insight into the ownership structure of one of Europe’s largest but most discreet buyout groups. Founded three decades ago by a group including Mackenzie, Van Rappard and Koltes, CVC has been gearing up to go public for more than two years.

During that time, both Mackenzie and Koltes have stepped back from the firm they built from a Citibank spinout into a €186bn global investment giant.

Mackenzie is the second-largest shareholder in the company with a 7 per cent stake, ranking behind US investment firm Blue Owl, which bought an 8 per cent holding back in 2021.

The amount of shares Mackenzie sells depends on whether the group decides to exercise an overallotment option, which means it can issue more shares. 

If the overallotment option is not exercised then Mackenzie will sell 8.7mn shares worth between €113mn and €130mn at the target price range. With the full overallotment, he will sell 10mn shares valued at up to €150mn. 

After the expected share sale, Van Rappard will overtake Mackenzie as the largest shareholder among the group’s co-founders, the filing document shows. Koltes currently holds 4.4 per cent of the firm.

If the company prices at its upper €15-a-share estimate, Van Rappard’s near 7 per cent stake would be worth roughly €1bn, with Mackenzie’s remaining stake worth about €900mn, according to FT calculations.

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Mackenzie, who is based in the low-tax offshore centre of Jersey and hosts friends and family on a 52-metre luxury superyacht, Grace, is one of the private equity industry’s best-known dealmakers.

A trained accountant, he began his career at 3i, one of the UK’s oldest buyout firms, before leaving to join Citibank in 1988. 

After CVC’s founding in 1993, he led on some of the firm’s highest-profile deals including an investment in Formula One, which the group eventually sold to US billionaire John Malone’s Liberty Media in a transaction valuing the sport at $8bn in 2016.

Since then, he has slowly been reducing his involvement with the group and has not been named as a key person on either of its previous two funds, the Financial Times previously reported.