CVC's High Performance Carries High Risk

CVC is the European private assets manager we cover with the most significant exposure to traditional private equity. Its greater private equity exposure increases the potential revenue contribution from volatile carried interest and investment income. We estimate that around a third of CVC's midcycle revenue will come from its share of carried interest and investment income. We expect management fees earned on its private equity funds will contribute around 70% of fees, with smaller contributions from credit and infrastructure. Its flagship European/North American buyout funds alone should contribute around half of overall management fees over the next two years.