Cinven: McAlpine replaces Langmuir as managing partner

The firm has announced exits this month generating proceeds of up to €3.7 billion.

Cinven has appointed Stuart McAlpine to replace Hugh Langmuir as managing partner.

Langmuir, who has served as managing partner from 2009 when he took over from Robin Hall, will become executive chairman, the European buyout firm said. 

Langmuir joined the firm in 1991 as one of its founding partners. He will lead the firm’s next fund raise of its sixth vehicle. The firm is expected to start talking to investors toward the end of this year with a view to fundraising in 2016, as reported by Private Equity International.

Cinven partner Guy Davison will also be retiring in June 2016, the firm said. He is part of the consumer team and joined the firm in 1988.

McAlpine, who is 48, joined the firm in 1996, was made partner in 2003 and joined the firm’s executive committee in 2007. He led the firm’s investment in airline IT services company Amadeus that generated a 7x return, and in medical diagnostic companies Phadia and Sebia that generated 3.4x and 2.4x returns, as well as the acquisition of pharmaceutical companies Labco, announced in May, and Synlab in June.

McAlpline was also involved with AMCo, the firm said. The sale of the pharmaceuticals platform to Concordia Healthcare Corporation for an enterprise value of £2.3 billion was announced this month, as reported by PEI.

AMCo was created through the merger of Mercury Pharma and Amdipharm and five additional deals. The £832 million ($1.3 billion; €1.1billion) investment was made through Fund V and generated a 5x return, as reported by PEI.

Cinven’s Fifth Fund, a €5.3 billion, 2012-vintage vehicle, is now 76 percent drawn, the firm said.

Proceeds from the three exits the firm has announced in September, including AMCo, could total around €3.7 billion, subject to earn-outs, it is understood.

In its latest realisation, the firm said it is selling UK life assurance company Guardian Financial Services to Switzerland’s Admin Re for a total consideration of £1.6 billion ($2.4 billion; €2.2 billion). The realisation will generate a 4x return, it is understood.

The firm is also exiting its remaining 17.3 percent shareholding in airplane leasing company Avolon, through a sale of 100 percent of the company to Bohai Leasing for a total of $7.6 billion. The investment was made by Cinven’s financial services team through Fund 4 and generated a 2.3x return, as reported by PEI.

The firm’s £693 million investment in Guardian, including subsequent buy and build transactions, was made through Cinven Fund 4.

The company was first acquired in 2011 from AEGON. In 2012 is bought three blocks of UK annuities from UK life assurance consolidator Phoenix and a further block from company in 2014, as well as Ark Life from Allied Irish Bank.

Under Cinven’s ownership, the group expanded its assets under management from £8 billion to £20 billion.

The transaction is expected to close in the first quarter of next year.

“We turbo charged the growth of this platform and a lot of people found this business interesting. We got a lot of inbound calls,” said Cinven senior principal in its financial services team Rory Neeson.

The firm’s strategy is to consolidate businesses within borders to benefit from market synergies, and it is pursuing a similar model in Germany, where it acquired Heidelberger Leben from Lloyds Banking Group in 2013, Neeson said. That acquisition was made through Fund 5.

In October 2014, the portfolio company made its first platform investment, acquiring Skandia Life’s German assets from Old Mutual. “We are very early in the investment period and plan to do more,” Neeson said.

In February the team acquired UK insurance premium finance company Premium Credit in a transaction valued at £452 million.

“It’s really early days,” Neeson said of the investment. “We’re working with the management team and looking to grow that business in its core market organically and well as looking at potential acquisition opportunities.”

When asked about the acquisition of further companies to serve as consolidation platforms, Neeson said that the firm was “definitely looking for new acquisition opportunities” in markets including Italy, Spain and Switzerland and in sectors including payment infrastructure, consumer finance and specialty finance and leasing.

“We have a great track record in life assurance and are well placed to do more,” Neeson said.