CVC Capital Partners’ ambitions to become a publicly traded diversified asset manager are on the back burner. The European buyout firm, which manages 161 billion euros in assets, postponed plans to list in Amsterdam until next year, the Financial Times reported, citing market uncertainty. Last year, CVC’s initial public offering got derailed by Russia’s invasion of Ukraine. Waiting another year, however, may not make it much easier for the Luxembourg-based group.
The delay seems logical. Shares of rival managers have been pummelled as investors fret over the Gaza conflict, a weakening economy and whether buyout groups can continue to flourish in an era of higher interest rates. Blackstone’s (BX.N) stock has fallen almost 20% since Sept. 19.
But markets may not be much more accommodating next year. True, interest rates may fall. But geopolitical tensions are unlikely to die down, given unresolved issues in the Middle East and Ukraine. Moreover, companies that pulled IPOs this year will likely try to list, causing a stampede. And, unless borrowing costs collapse, private equity managers will still be constrained by higher funding costs and have to grapple with indebted assets: Moody’s expects defaults of junk-rated companies to rise to nearly 5% in the first quarter of next year. CVC’s prudence may delay, but not avoid, a tricky IPO. (By Pamela Barbaglia)
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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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