CVC sells stake in TMF Group to itself

CVC Capital Partners has sold its stake in TMF Group to another fund owned by the firm, TMF Group confirmed to The Drawdown.

According to the Financial Times, CVC sold its stake in TMF Group to its strategic opportunities fund, “following market turmoil, which made a listing or external sale more difficult.”

CVC established its strategic opportunities strategy in 2014 to “invest in high-quality businesses that may not suit a traditional private equity mandate,” stated the firm’s website. It typically invests between €1bn and €5bn and has a longer holding period of around six to 15 years, and currently has 13 portfolio businesses, not including TMF Group.

Additionally, CVC sold a significant minority stake in TMF Group to sovereign wealth fund Abu Dhabi Investment Authority.

There will be no change to the company’s strategy, leadership and management following these transactions, TMF Group confirmed.

History

In October 2017, CVC’s Fund VII acquired TMF Group from DH Private Equity Partners (which had purchased the firm back in 2008) in a deal worth €1.75bn. The private equity firm stated it was the first investment made by CVC’s seventh vehicle, which had raised more than €16bn earlier that year.

At the same time, TMF Group announced it would not proceed with its intention to float on the London Stock Exchange, following CVC’s acquisition.

Since being under CVC’s wing, TMF Group has carried out a number of acquisitions. The firm acquired Guernsey fund admin Gentoo (October 2017), bought Luxembourg-based Selectra ManCo from service delivery platform Farad Group (October 2020) and purchased US-based Venture Back Office, its first US fund services acquisition (April 2021).

Having held the business for almost five years, by January 2022, Bloomberg Law reported that CVC was said to be considering an IPO for TMF Group, and was believed to be working with Rothschild & Co to explore options for the business. 

Commenting on this latest transaction, a spokesperson for TMF Group said, “TMF Group is pleased to confirm that a wholly owned subsidiary of Abu Dhabi Investment Authority (ADIA) has acquired a significant minority stake in TMF Group alongside funds managed by CVC Capital Partners.

“ADIA’s investment will support the strong performance and positive growth trajectory demonstrated by TMF Group since CVC Funds’ initial investment.”