Private equity firm CVC is undergoing a restructuring of its US operations and is actively pursuing the acquisition of a private credit firm. This move comes in response to a series of underperforming investments in the American market, as reported by the Financial Times.
CVC has appointed new co-heads, Lorne Somerville and Cathrin Petty, to lead its North American private equity business, replacing Chris Stadler, who had held the position for 18 years. Both Somerville and Petty previously worked at CVC’s London office, indicating a strategic shift in leadership.
Cathrin Petty - joined CVC in 2016 from J.P. Morgan, where she was Head of Healthcare for the EMEA region. Prior to that, she was a Partner at Apax Partners, focusing on healthcare and life sciences investments. She holds a master’s degree in Natural Sciences from the University of Cambridge and a postgraduate diploma from Cambridge Judge Business School.
Lorne Somerville - joined CVC in 2008 after serving as Joint Global Head of Telecommunications at UBS. He holds an MA in Computer Sciences from the University of Cambridge and an MBA from IMD in Lausanne.
In addition to the leadership changes, CVC is looking to strengthen its US presence by acquiring a private credit firm. This follows a failed attempt to purchase HPS Investment Partners, which was sold to BlackRock last year. The firm is also interested in investing in private capital groups focused on real estate outside of Europe.
Since going public last year, CVC’s shares have increased by over 50%, and the firm now manages €191 billion in assets. Notable acquisitions include a stake in Formula One, but replicating its successful European model in the US has proven challenging.
Stadler will transition to the role of chair for North America, where he will not be directly involved in new deals but will remain on the investment committee to enhance returns from existing investments. This change comes after several of his investments have underperformed, highlighting the unique challenges CVC faces in the US market compared to its European operations.
CVC has experienced some successes in the US, with its 2008 vintage fund outperforming its European counterparts. Successful acquisitions include Authentic Brands Group and ExamWorks in 2021. However, the firm’s 2014 vintage fund has struggled, and there are concerns that the 2017 vintage fund may encounter similar issues.
Since 2008, CVC has exited only a quarter of the 25 US deals made through its flagship buyout funds. Notable troubled investments include ConvergeOne, which filed for Chapter 11 bankruptcy after being taken private by CVC, and Anchor Glass, where CVC invested $50 million amid negative cash flow forecasts.
CVC's investment in Petco, acquired in 2016 for $4.6 billion, has also faced difficulties, with the company's share price plummeting 80% since its 2021 IPO, now valued at around $1 billion. Conversely, its investment in Teneo, a strategic communications firm, has been successful, with earnings more than doubling since its acquisition in 2019, despite some reputational challenges.
Petco Animal Supplies (2016): Acquired by CVC and CPPIB for $4.6b; later went public in 2021 at a valuation over $5b
PDC Brands (2017): Acquired for $1.4b; U.S.-based beauty and personal care company
Messer Industries (2019): CVC partnered with Messer Group to acquire Linde AG’s U.S. gas business and Praxair assets for $3.6b
ConvergeOne (2019): Taken private in an $1.8b buyout; later filed for Chapter 11 bankruptcy in 2024
Teneo (2019): Acquired majority stake at a valuation of $700m; expanded to 1,450+ employees and 40 offices
Ontic (2019): Acquired for $1.3b; aerospace parts supplier specializing in OEM-licensed legacy components
Authentic Brands Group (2021): Acquired a large stake, valuing ABG at $12.7b; expanded portfolio with Reebok acquisition
MedRisk (2021): Acquired majority stake in a managed physical therapy network in partnership with Carlyle
Radwell International (2022): Invested to recapitalize Radwell, a supplier of industrial automation parts
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