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CVC co-founder who led F1 buyout bows out before planned IPO

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Donald Mackenzie, one of CVC Capital Partners’ co-founders and most successful dealmakers, is stepping back from Europe’s largest buyout firm ahead of its long-awaited public listing.

Mackenzie, 66, was among a small group of executives at Citibank who spun out in 1993 to form what is now one of Europe’s biggest private equity firms. CVC now manages €188bn in assets and last year raised €26bn, the largest buyout fund on record.

The Scotsman is the latest founder at CVC to step back in recent years as the group undergoes a generational transition that has seen younger dealmakers, including 61-year-old managing partner Rob Lucas, take over the operations.

Mackenzie’s decision also comes as CVC is preparing for an initial public offering, which will see the notoriously secretive fund manager subject to increasing scrutiny.

The firm postponed plans to float in November because of market uncertainty, missing out on a subsequent boom in the share prices of publicly traded peers such as Blackstone and KKR.

“When we founded CVC in the early 90s it was our ambition to create a multigenerational business that would continue to flourish long after the founders had gone. I believe we have achieved that. The business is in very good shape and in good hands,” Mackenzie said in a statement. 

Mackenzie will remain on CVC’s board of directors and focus on his “private interests”.

A trained accountant, Mackenzie began his career in private equity at 3i, an investment company formed by the Bank of England, when the buyout industry was a fraction of its current size.

In 1988, he joined Citibank where he met colleagues including his future CVC co-founders Rolly van Rappard and Steve Koltes. They spun the business out in 1993 in a move that would prove wildly lucrative for the partners involved.

Mackenzie led CVC’s buyout of racing company Formula One, one of the firm’s most lucrative deals and one that also dragged the media-shy firm into the spotlight.

The deal proved controversial and led to Mackenzie facing a grilling in a German court over undisclosed payments involving then-F1 chief Bernie Ecclestone and a banker. 

But CVC ended up selling the company to US billionaire John Malone’s Liberty Media in a transaction valuing the sport at $8bn in 2016. It had bought a majority stake in 2005-2006, funding the acquisition with about $1bn in equity and $2.5bn of debt.

Mackenzie also became the unwitting face of the industry in the UK when he was summoned to appear at a parliamentary hearing in 2007, along with a small group of other buyout executives. Lawmakers grilled the investment tycoons in a testy exchange

It was in the years following the global financial crisis that CVC’s growth accelerated, as investors were drawn to its market-leading returns.

CVC sought to expand into other areas such as credit while raising a succession of ever-larger funds. The firm also signed a series of marquee deals, acquiring assets including the Six Nations rugby tournament and Unilever’s tea business.

In 2021, CVC sold a stake in itself to specialist finance firm Blue Owl in a deal valuing the company at €15bn. Koltes stepped back in 2022.

The group also began making preparations to go public, following peers such as EQT and Blackstone, in a move that would allow co-founders such as Mackenzie, van Rappard and Koltes to cash out. 

The company was ready to go public last year before pulling plans over uncertainty caused by conflict in the Middle East and concerns over the state of the wider economy.

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