PitchBook News - Will CVC Capital's IPO inspire others?

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The Weekend Pitch

April 28, 2024

Presented by Masterworks

(Jenna O’Malley/PitchBook News)

If CVC Capital Partners was the canary in the coal mine for Europe's still-fragile recovery of the IPO market, then it has come through chirping, jumping 24% at the start of its first day of trading in Amsterdam.

This is The Weekend Pitch, and I'm Andrew Woodman. You can reach me at andrew.woodman@pitchbook.com or on Twitter @adwoodman.

The IPO, in which CVC raised €1.25 billion (about $1.34 billion) at a €15 billion valuation, represents the largest IPO by market cap for a European PE firm. For comparison, Sweden's EQT went public at a €6 billion valuation in 2019, and London-based Bridgepoint was valued at €3.3 billion in 2021.

The road to publicly listed status was tortuous for the Luxembourg-headquartered firm, which started prepping its Amsterdam debut as early as 2021. But plans had to be put on ice twice: first after Russia invaded Ukraine in early 2022 and again last year due to market volatility and fresh conflict in the Middle East.

Not only has CVC added its name to a growing roster of Europe-listed fund managers, it has given hope for a long-awaited rebound for Europe's IPO market. On the other hand, the debut in Amsterdam is another blow for London, which has missed out on hosting yet another high-profile IPO.

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A message from Masterworks

This painting sold for $8 million and 2,478 investors profited

All thanks to Masterworks, the award-winning platform for investing in blue-chip art. To date, every one of Masterworks’ 21 exits has individually returned a profit to investors in those works. With 3 representative sales, Masterworks investors realized net annualized returns of 13.9%, 14.6%, and 17.8%.

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Shares of every offering are limited, but PitchBook readers can skip the waitlist with this exclusive link.

See important Reg A disclosures at masterworks.com/cd.

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A rebuilding year for global M&A

Global M&A dealmaking is slowly on the mend after two consecutive years of declines. A stronger recovery is being held back by sluggish PE dealmaking, according to our latest Global M&A Report, sponsored by Liberty GTS.

Deal multiples have remained stable—a sign that the valuation reset may be complete—and might have room to move higher to catch up with elevated prices of public companies.

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A better benchmark
for buyout funds

It's time to boost your benchmarking tools. Our recent analyst note uses take-private data, quarterly financial statements and historical stock prices to capture the fundamental characteristics of buyout investing in a portfolio of public equities.

Analysts learned that PE funds are no magic bullet, performing mainly in line with public equities. LPs can use this analysis to better benchmark buyout fund performance and more clearly understand their risk-return profiles.

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Cracking Europe's IPO window

(Catherine Falls Commercial/Getty Images)

If you're holding your breath for the IPO floodgates in Europe to open, you may be waiting awhile still, according to our recent analyst note. Prolonged uncertainty surrounding interest rate cuts, geopolitical unrest and a slow recovery in valuations will likely push out any meaningful rebound in IPOs to 2025.

The market backlog has peaked at 300 companies, and there's a European exchange brain drain while the public market is particularly inhospitable to unprofitable listings. It looks like a slow road back to breezy times.

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Stay tuned

Keep an eye out for these insights and research reports coming out this week:

Q1 2024 Agtech Report
Analyst Note: Establishing a Case for Emerging Managers
Q1 2024 Information Security Report
Q1 2024 Carbon & Emissions Tech Report

This edition of The Weekend Pitch was written by Andrew Woodman. It was edited by Alec Davis and Clarinda Simpson.

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