Citibank's Loss

Citicorp Venture Capital

In 1993, a group of senior investors at Citicorp Venture Capital in Europe spun out of Citibank to create an independent private equity group known as CVC Capital Partners.

Following the spinout, CVC launched its first investment vehicle with $300M in commitments, with roughly half of their capital coming from the Citi conglomerate and half from high net worth individuals.

CVC quickly established a reputation as one of the sharpest private equity firms in the Europe region. To date, CVC has accomplished enough within the megafund PE arena to claim the throne:

• CVC Capital Partners IX (2023) was the largest private equity fund ever raised at $28.4B

• CVC Capital Partners VII (2020) was the third largest private equity fund ever raised at $25.4B

• CVC is the only firm to notch two spots (#1 and #3) on the top 10 largest private equity funds list, with Blackstone, Advent International, Apollo, Hellman & Friedman, Thoma Bravo, Strategic Value Partners, Silver Lake, and KKR taking the other 8 spots.

• CVC’s crown jewel investment in Formula One Auto Racing netted the firm ~$8B in cash out and remaining value, leading to a 751.3% return.

CVC is now aiming to go public around May of this year, according to reports. The firm is following in the footsteps of other private equity giants such as Blackstone, Apollo, KKR, TPG, The Carlyle Group, EQT and a few others. They are seeking a $15B valuation from the public markets.

With an IPO on the horizon, now is an suitable time to dive into an investment that could be CVC’s next F1…

Rich Off Rugby

In 2018, CVC bought a 27% stake in Premiership Rugby for ~$300M.

In 2020, CVC double dipped, with a 28% stake in the United Rugby Championship for ~$169M.

In 2021, their intentions became crystal clear when they bought a 14.3% stake in Six Nations Rugby for ~$502M.

With nearly one billion dollars invested in rugby over the course of 3 years, CVC saw an opportunity in what is considered a secondary European sport.

Rugby is a fragmented market, and competition across leagues led to losses for both the franchise owners and the fans, while broadcasters like TNT and Sky Sports benefitted by inking cheap media deals. CVC’s sport investment division, led by Nick Clarry, saw potential for the CVC to step in strategically and help create the “F1 of rugby”.

Drake Star Sports Tech Report

CVC is not the only ultra institutional player getting deep in the weeds with secondary sports investments.

In Drake Star’s Global Sports Tech Report (2023), the following private equity megafunds were named “Investors to Watch in 2024”:

• CVC

• Blackstone

• Bain Capital

• Ares

• EQT

Another notable fund named alongside these Goliaths is Profluence Capital, a sports focused investment fund founded by Andrew Petcash and Mitch Baruchowitz.

Check out the first mainstreet media podcast featuring Andrew Petcash. We discuss an array of topics including:

• Andrew’s basketball career at Boston University and qualifying for March Madness when COVID hit

• Getting his media company acquired before starting Profluence

• His reaction to being named a 2024 Investor to Watch by Drake Star

• Profluence Capital’s framework for evaluating emerging sports IP, including sports franchises and leagues

Dive Deeper

• Listen to the first episode of mainstreet media featuring Andrew Petcash here.

• Read the Drake Star Global Sports Tech Report (2023) here.

• Read How CVC Has Made $8.2B from F1 Racing by Forbes.

• Read an article on CVC’s Rugby Investments by Financial Times.