Half Year 2026 CVC Capital Partners PLC Earnings Call Transcript
Key Points
- Record realizations up 79% LTM with exits at highly attractive returns, including a 3.6x gross multiple and 26% gross IRR across private equity exits.
- Strong fundraising momentum across all platforms, with gross inflows of EUR11 billion and successful closes for Catalyst ($3.4B) and SOF VI ($9.3B), positioning well for Fund X.
- Fee-paying AUM grew 9% year-on-year to EUR153 billion, driven by 19% growth in credit, secondaries, and infrastructure, with a diversified platform reducing concentration risk.
- Financial performance improved with EBITDA up 12%, adjusted EPS up 11%, and dividend per share up 12%, supported by strong cash generation and a healthy balance sheet (net debt leverage at 1.2x).
- Portfolio companies delivered 13% EBITDA growth over the last 12 months, with value creation of 11%, reflecting effective sourcing and value creation strategies.
- Private wealth channel scaled rapidly, with evergreen structures reaching EUR7 billion in aggregate value, up 4x year-on-year, and net inflows of EUR2.5 billion in H1.
- Credit platform shows strong performance with low default rates (0.2% in direct lending) and expansion into new areas like asset-based lending via the Marathon acquisition, enhancing growth prospects.
- Deployment pace in credit was muted in H1 due to lower industry-wide new deal activity, which could temporarily slow growth in that segment.
- Fee-paying AUM in private equity remained flat year-on-year, reflecting strong realizations offset by inflows, indicating potential stagnation in the core PE business.
- The FRE margin of 57% in H1 was partly boosted by EUR22 million of catch-up fees, which are non-recurring and may not be sustainable in the second half.
- Total operating expenses grew 7% year-on-year, with expectations of slightly below 10% growth for the full year, potentially pressuring margins if revenue growth slows.
- The effective tax rate increased to 20.5% from last year, which could reduce net profit growth if it continues to rise.
- Fund X activation is not expected until H1 2028, with deployment at 65% for Fund IX, meaning a significant earnings step-up is still two years away, creating a gap in growth momentum.
- The integration of Marathon and the launch of new products like credit secondaries carry execution risks, and the competitive environment for insurance mandates is intense.
Good morning, and welcome to the CVC Capital Partners PLC 2026 Half Year Results Call. Please be aware that this call is being recorded. (Operator Instructions)
I would like to hand over to Bruce Hamilton to begin the meeting. Bruce, please go ahead.
Thank you, operator, and good morning, everyone. Today, we'll update you on our performance for the first six months of the year. We have up to 60 minutes for the call. We'll begin with the presentation. And after that, we'll open the floor to questions.
Presenting today are Rob Lucas, CEO; Rob Squire, Head of Client and Product Solutions; Peter Rutland, President; and Fred Watt, CFO. Rob, over to you.
Thanks, Bruce, and good morning, everyone. Welcome to our half-year results call. Starting on slide 2, you can see the first half of 2026 was a period of real momentum with strong performance
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