Content area
Full text
CVC Capital Partners has gone from strength to strength in the wake of chairman Michael Smith's departure.
When Michael Smith, the chairman of London-based private equity group CVC Capital Partners, stepped down last fall, he managed to do something simple that many financial firms have failed to do in the past: He successfully navigated his succession.
Succession has been a problematic issue at other financial firms, and private equity firms are no different. There is constant speculation about who will eventually take over at Blackstone from Steve Schwarzman and Hamilton James, and Apax Partners chief executive Martin Halusa is staying on past the firm's normal retirement age of 60 to see the latest fund through its investment phase. Meanwhile, at Charterhouse Capital Partners, a tussle for leadership among senior partners saw a favourite for the top post rejected and another leave the firm.
Smith's exit from the top spot at CVC addressed the issue of how long he would sit at the head of the firm and who would succeed him, before it became a problem and a cause for concern among investors. Smith, who joined CVC 30 years earlier, when it was still part of New York-headquartered Citigroup and had overseen the spinout from its banking parent in 1993, would be replaced by three co-chairmen -- Donald Mackenzie, Rolly Von Rappard and Steve Koltes -- among the firms' longest-serving and most respected partners.
The three, all in their 50s, have committed to stay with the firm until about 2020. Mackenzie, who led CVC's investment in motor racing series Formula 1 -- one of its most successful recent deals -- will be in charge of investment. Von Rappard, credited with establishing the firm's presence in the U.S., will carry the day-to-day running of the firm. And Koltes, who was in charge of CVC's business in German-speaking Europe, leads fundraising and investor relations.
The success of the move can be seen in the fundraising that CVC embarked upon just after his departure, in the middle of one of the toughest climates for raising capital that the private equity industry has seen.
In existence since 1981, CVC is one of the largest Europe-focused private equity groups, having raised $50 billion from investors and made some 300 investments....