CVC agrees to DIF Capital deal

December 2023 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

December 2023 Issue

In a deal which will see the firm boost its position in the infrastructure space, private equity group CVC has acquired a majority stake in Dutch infrastructure investor DIF Capital Partners in a deal worth about €1bn in cash and shares.

The transaction, which is subject to regulatory and other consents and expected to close in Q4 2023 or Q1 2024, will create a global private markets manager with seven complementary strategies and approximately €177bn of total assets under management (AUM).

Founded in 2005, DIF manages €16bn in assets and employs more than 200 people across 11 offices, according to its website. The firm invests across Europe, North America and Australia.

DIF currently has two funds in the market, one of which is its seventh flagship fund, DIF Infrastructure VII, which has targeted €4bn and had a first close in August 2022 at €2.2bn. The firm’s other active fund is the third Core-plus Infrastructure Fund, which has targeted €1.5bn and raised €950m last year. Both funds were launched in 2022 and are expected to reach their targeted amounts or possibly exceed them.

By acquiring DIF, CVC will gain an infrastructure platform which it describes as directly adjacent and highly complementary to its existing private equity, secondary and credit strategies. Upon completion, DIF will continue to operate under its own brand and retain independence over its operations and investment decisions.

“Expanding into infrastructure is a logical next step for us, given the long-term secular growth trends in infrastructure and its adjacency to our existing strategies,” said Rolly van Rappard, chair and co-founder of CVC. “We have known the DIF team for several years, and we are delighted to partner with one of the top pure-play global infrastructure managers, with an impressive track record of performance and growth.”

“We are excited to join forces with DIF, a top-performing global infrastructure manager,” said Rob Lucas, managing partner at CVC. “DIF’s business model and culture is deeply aligned with our local model, and our new infrastructure platform will prove highly complementary to our leading private equity, secondary and credit strategies. We are pleased to welcome Wim, the DIF Partners and the entire DIF team to the CVC group and together, we look forward to being a global leader in infrastructure.”

“We are delighted to be teaming up with CVC, which is a natural step in the evolution of DIF and, together with my partners, I look forward to leading DIF in this next phase of growth,” said Wim Blaasse, chief executive and managing partner at DIF. “We have known the CVC team for many years, we have been very impressed by everything they have built and we are excited about becoming part of the CVC group. This transaction enables us to benefit from CVC’s global platform, scale and investor relationships, and to double down on important infrastructure sectors like energy transition and digitalisation while retaining independence over our investment decisions.”

Private equity firms are increasingly turning their attention to infrastructure in recent years, with successful fundraisings carried out by EQT, KKR and Brookfield to invest in infrastructure deals. DIF invests in a wide range of infrastructure but recent activity in digital infrastructure includes investments in Canadian fibre platform RFNOW, Finish fibre platform Valoo and the acquisition of US-based data centre platform Tonaquint.

In July, CVC raised €26bn for its ninth Europe and Americas private equity fund, defying the fundraising slowdown with a record cash haul for the firm. In the same month, Glendower Capital said that it had raised nearly $6bn for its fifth global secondary private equity fund, marking the first fund closed since CVC acquired the firm last year.

Richard Summerfield