Yahoo Finance Citi Spinoff Mints $4 Billion Fortune for CVC Buyout Barons
(Bloomberg) -- About three decades ago, a group of Citigroup Inc. dealmakers including Donald Mackenzie, Steven Koltes and Rolly van Rappard left the Wall Street giant to strike out on their own.
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That decision has proved lucrative, with the trio now among the biggest winners of this week’s long-awaited initial public offering of CVC Capital Partners.
The three founding partners now hold most of the roughly $4.2 billion fortune that senior CVC figures control through disclosed stakes after the Luxembourg-based buyout firm ended its first day of trading on Friday at €16.35 ($17.49) per share, according to the Bloomberg Billionaires Index.
Mackenzie is also pocketing a windfall of at least $175 million by selling stock through the Amsterdam listing, helping push his net worth above $1 billion and sealing his status as one of Europe’s richest private equity figures.
A representative for CVC, which priced its IPO at €14 per share on Friday, declined to comment.
Also read: CVC Capital, Backers Raise €2 Billion in Long-Awaited Listing
Beyond allowing the founding partners to cash out part of their wealth in the closely held business, CVC’s listing is also fueling hopes of a rebound in Europe’s IPO market, even though a full-blown recovery in listings isn’t fully expected until next year.
Koltes, 68, is also selling at least a $40 million stake through the IPO, further trimming his connections to the firm after stepping back from active roles in 2022 to pursue other interests. Those include investments in artificial intelligence, outdoor lifestyle and sustainable food companies.
Mackenzie, 67, similarly announced this year that he will no longer be involved in CVC’s day-to-day operations. Van Rappard will remain as the sole chairman following the IPO, having previously shared the title with his fellow founding partners.
The 63-year-old, who isn’t selling any stock, will be CVC’s biggest individual shareholder with a 6.7% stake worth about $1.2 billion, based on the company’s closing share price. Other major disclosed shareholders include Chief Executive Officer Rob Lucas, 61, who controls a $621 million stake, and managing partner Javier de Jaime Guijarro, 59, whose holdings are worth $609 million.
Citi Origins
CVC traces its origins to a London-based arm of Citigroup’s venture capital unit, which spun out of the Wall Street firm in 1993 through a management buyout to become a standalone business.
Over the years, it transformed from a company with just a handful of professionals into one of Europe’s largest private equity houses, becoming renowned along the way for its hard-charging culture.
High-profile deals ranged from buying stakes in Swiss watchmaker Breitling AG to the Six Nations Rugby competition. But its 2006 purchase of the Formula One racing series cemented CVC’s reputation with investors.
By the time CVC sold the business to US billionaire John Malone’s Liberty Media Corp. just over a decade later, the buyout firm returned 500% to investors, ranking among the best on record and marking a pivotal moment for the company as it built out its brand globally.
CVC founding partner Michael Smith, now 71, had by then retired along with some of his other peers and handed the chairman role to Mackenzie, Koltes and van Rappard. The trio has helped steer the company toward a public listing since at least 2022, with previous attempts before this month’s debut hampered by volatile markets.
In the meantime, CVC defied a challenging fundraising environment to build a €26 billion flagship fund last year, more than double the size of its main vehicle a decade before.
Some of CVC’s richest shareholders have already established firms to manage their wealth.
Van Rappard has a Luxembourg-based family office, Steflot, which has more than $200 million in net assets and controls a stake in Greek software business Entersoft SA, filings show.
Koltes oversees his personal investments through Kaltroco, a family office based in the UK crown dependency of Jersey with more than two-dozen companies in its portfolio, including bird-watching app Birda and natural food business the Rainforest Co.
In November, Kaltroco also acquired a minority stake in Dave Cantin Group for an undisclosed sum. The New York-based company advises retail automotive groups and their owners.
--With assistance from Tom Maloney and Swetha Gopinath.
(Updates with closing share price in third paragraph.)
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