CVC signals intent with twin hires

CVC Capital Partners is notoriously media-shy. So it won’t have relished the recent attention lavished on one of its most high profile investments, motor racing series Formula One.

But away from the headlines – which have been dominated by the rumoured plan to float F1 on the Singapore stock exchange (and the controversial decision to go ahead with a race in Bahrain) – CVC has been quietly bolstering its senior ranks with two intriguing hires.

One was Stephen Hickey, who was previously a partner and global head of leveraged finance at the Vampire Squid itself, Goldman Sachs. Hickey joined CVC Credit Partners, the firm’s debt arm, as chief risk officer in April. Based in New York, he will also chair its new global portfolio committee.

At a time when many private equity groups are looking to develop debt investment arms (sometimes from scratch) in order to plug a perceived market gap, Hickey brings substantial clout. “His senior sourcing, risk management and investing expertise in the US and Europe across products and cycles will be integral to the development of our business as we adapt to these changing markets for corporate credit,” CVC managing partner Chris Stadler said last month, adding that the expansion of the firm’s credit business would be “synergistic to our private equity business”.

Speaking of which, the firm has also brought in Bertrand Meunier, the former head of French buyout firm PAI Partners, as a managing partner and member of the board. One French market source described Meunier to Private Equity International as “a really impressive dealmaker who’s very well-regarded across Europe”. CVC managing partner Geert Duyck was similarly effusive, describing him as “one of the most successful investors in Europe over the past decade”.

Meunier was one half of the senior duo who left PAI somewhat acrimoniously in 2009. Alongside Dominique Mégret, formerly PAI chief executive, he then launched a new firm, M&M Capital. The pair planned to raise a debut fund with a target in the €1 billion to €1.25 billion range – smaller than the vehicles they’d managed at PAI, but still a hefty amount of capital for a first-timer.

Sadly, it didn’t work out. “The economic crisis was so strong, and so long, that we decided it was not in anyone’s best interests to begin raising and then investing capital until at least mid-2012,” Mégret tells PEI. “Prices were too high, financing too hard to find, and we decided that it would be best to wait.”

However, Mégret turned 65 earlier this year, and this prompted a change of heart. “With private equity, you need to be able to devote your full attention to a fund for 10 years or more. And at the age of 65, it was difficult for me to say to investors that I’d still be full time at the age of 75. So we agreed that we would keep M&M as a private partnership, and that Bertrand should take up one of the many offers he’d received.” Henceforth, M&M will look to invest on a deal-by-deal basis, possibly raising a smaller fund in due course.

CVC, on the other hand, has billions of Euros burning a hole in its pocket, across a number of different funds. And when the firm next comes to market, the presence of ‘star players’ like Hickey and Meunier on its roster, allied to its powerful brand name, should stand it in good stead.