- New CVC fund targeting 12.5 bln euros
- As much as a quarter of the new fund for U.S. deals
- Texas County & District PE portfolio valued at $3.1 bln
Texas County & District Retirement Systemcommitted 60 million euros ($67 million) to CVC Capital Partners VII, a disclosure on the system’s website shows.
CVC Capital Partners is targeting 12.5 billion euros, according to New Jersey State Investment Council memos. CVC is charging limited partners a 1.5 percent management fee during the fund’s six-year investment period, a Cliffwater memo for Rhode Island State Investment Commission says. The fee falls to 1.25 percent after the investment period.
CVC will collect 20 percent of the fund’s profits as carried interest, over a 6 percent return hurdle, according to Cliffwater. Around 3 percent of the fund’s total commitments will come from CVC.
The firm will invest primarily in European assets, targeting gross returns in excess of a 20 percent internal rate of return and 2x investment multiple. As much as a quarter of the fund’s capital will be used to invest in U.S. businesses.
Texas County & District committed 40 million euros to the firm’s previous flagship fund in 2013. That fund had yet to generate meaningful returns as of Sept. 30, New Jersey documents show. Its 10.75 billion euro 2008 flagship fund was netting a 17.5 percent IRR and 1.86x multiple as of that date.
The Texas system valued its private equity portfolio at around $3.1 billion as of March 31, The portfolio’s five-year annualized return was a little more than 13 percent as of that date.
The retirement system’s total investment portfolio was valued at $27 billion at the end of the first quarter.
Action Item: More about Texas County & District: www.tcdrs.org