CVC closes €11bn fund, eyes Royal Mail

CVC has missed the €12.1bn target for its fifth European buyout fund in a tough environment that has seen several firms slash targets on new and existing funds. The UK-headquartered firm is also reported to be among private equity firms looking to part-privatise UK Royal Mail.

CVC Capital Partners has held a final close on its latest fund, European Equity Partners V, on €11 billion. The fund began marketing in 2008 with a €12.1 billion target.

Its fourth European fund, European Equity Partners IV, closed on €6 billion in 2005.

CVC European Equity Partners V was raised in less than a year, according to the Wall Street Journal, which first reported the fund's close.

Last March, CVC was so confident about LP demand that it increased the fund's target from €11 billion to €12.1 billion. The Pennsylvania Public Schools Employees Retirement fund was among the early investors, committing €300 million in January last year.

Other firms have been seen to slash fundraising targets and management fees in view of the market downturn. Last week TPG cut its Financial Partners Fund by 25 percent and HgCapital cut the management fees for its latest fund, capping them at 1.75 percent for its prospective £2 billion Hg Fund VI; In December 10 percent of Permira IV’s 180 limited partners accepted the manager’s offer to cap their commitments to the fund at 60 percent; In early January The Carlyle Group closed its fifth US buyout fund on $13.7 billion, below its original target of $15 billion; Both The Blackstone Group and Madison Dearborn have also cut fund targets. 
Meanwhile, CVC is reportedly interested in backing the UK's Royal Mail.

Royal Mail: In need
of fresh air

Last week the UK government's business secretary, Peter Mandelson, said the government would welcome a private partner to rescue the country's beleaguered mail service, calling for part-privatisation to send in “a gale force of fresh air to the management culture of Royal Mail”. There have been widespread media reports that CVC is has responded to Mandelson's plea and is eyeing Royal Mail for acquisition.