European veteran private equity firm CVC is also planning to go public for fundraising. It just raised 200 billion in July.

In the current market environment, which is not suitable for IPOs, is Europe's largest private equity firm about to embark on a "challenge"?

On October 17th, it was reported that CVC Capital, a well-established private equity firm in Europe, is preparing to start the IPO process and plans to announce its intention to list in Amsterdam in the next few days or next week.

In 2021, CVC had sold a minority stake with a valuation of $15 billion. If CVC successfully goes public this year, it will become the largest IPO in Europe this year and the largest listed private equity firm in European history.

CVC is one of the largest private equity firms in Europe, headquartered in Luxembourg. According to the CVC website, its assets under management exceed 160 billion euros (approximately $169 billion, 1.235 trillion yuan).

In July of this year, CVC announced that it had raised 26 billion euros (approximately 208.5 billion yuan) for its ninth acquisition fund, setting a record for the largest acquisition fund in history.

The fund announced its fundraising at the beginning of this year, with an initial target of 25 billion euros, but the final amount raised exceeded the original target.

It has been reported that this record-breaking fundraising amount may further support CVC's listing plan.

Not an "excellent opportunity" for IPOs

However, at a time when CVC's IPO news is circulating, the current IPO market is in an unstable period.

The Federal Reserve's interest rate hike cycle has not ended, and the high interest rates have greatly increased financing costs, while the economic growth rate has shown signs of slowing down.

On the other hand, unexpected events such as Saudi Arabia's oil production cuts and geopolitical risks in the Middle East have once again cast a layer of uncertainty over the market.

Earlier this year, the "world's largest IPO" ARM successfully went public, but its stock price fluctuated dramatically after listing, sometimes exceeding the issue price of $51, and sometimes falling below it. At the end of September, it was 5% higher than the issue price.

In the most recent IPO in the US stock market, German footwear brand Birkenstock had the worst IPO debut performance in nearly two years: it opened below the issue price and closed down 12.6% on the first day of trading.

According to data from private market research firm PitchBook cited by Wall Street News, there have been 80 companies with IPO plans backlogged in the past year, indicating that it is not an excellent opportunity for IPOs.

Mike Volpi, Managing Partner of venture capital firm Index Ventures, said: In our investment portfolio, we would advise: unless it is absolutely necessary, it is better to put the IPO plan on hold due to the recent market volatility... Unless you must go public, it is better to wait until the second half of next year.

Jason Greenberg, Co-Head of Global Technology, Media, and Telecommunications Investment Banking at Jefferies, said:

There are still risks in going public, and the most likely companies to IPO are not those seeking growth capital or liquidity for employees.