Cvc Capital Partners Plc

Good morning and welcome to the cvc capital partners plc 2026 half year results call please be aware that this call is being recorded and all participants are currently in listen only mode i would like to hand over to bruce hamilton to begin the meeting bruce please go ahead thank you operator and good morning everyone today we'll update you on our performance for the first six months of the year

We have up to 60 minutes for the call. We'll begin with the presentation and after that we'll open the floor to questions. Presenting today are Rob Lucas, CEO, Rob Squire, Head of Clients and Product Solutions, Peter Rutland, President and Fred Watt, CFO. Rob, over to you.

Thanks Bruce and good morning everyone. Welcome to our half year results call. Starting on slide two, you can see the first half of 2026 was a period of real momentum. is strong performance across every part of our business. Once again, we've delivered record realisations at highly attractive returns, a track record that remains second to none. This is translating into fundraising momentum across all four platforms and each client channel, driving growth in fee-paying AUM, greater diversification and still stronger financial performance. First, Let me provide a bit more detail on our operating performance. Realizations continued at record levels, up 79% LTM, and these continue to be delivered at highly attractive reserves. Value creation saw further increases to 11% over the last 12 months, reflecting the benefit of our sourcing and value creation engines. In the first half of this year alone, value creation for PE and infra was 6%, Deployment continued at a consistent pace of €26 billion over the last 12 months to June and with a strong pipeline going forward. And we saw broad-based fundraising momentum right across the business, with gross inflows of €11 billion, again showing the strength of our diversified platform. That operating momentum translates directly into our financial performance. The growth of fee-paying AUM up 9% year-on-year, fee-related revenues followed that trend, growing 9% as well. Combined with strong performance-related earnings, first-half EBITDA has increased by 12%, and adjusted EPS is up 11% year-on-year. And our strong, predictable cash generation supports a dividend per share of 12% year-on-year. This is alongside our ongoing share buyback program. Craig will take us through the financials fully in a few minutes. Looking in more detail at realizations, our record last 12 months really does mark us out as an industry leader and follows a record year in 2024 and again in 2025. Realizations in the first half of 2026 were up 19%. driven by exit strength right across our platform. These include notable exits from our Europe Americas Fund 7 and 8, such as Natogy, the Spanish-based energy company, and Reyna, our MedTech eye care company, as well as from Asia and infrastructure, as highlighted on the slide. For the full year, we expect realisations broadly similar to last year, These record realizations feed directly into our track record of creating exceptional returns for our clients and delivering DPI that truly differentiates us. Over the past four and a half years, we've returned 33% more capital than we have called from our private equity platform. And within that, 40% more than we have called from our Europe Americas franchise, something that is quite unique across our peer group. In an environment where our clients are ever more focused on DPI, this is central to our high confidence in our future fundraising, not least Fund 10, which will be launching in six months' time. Our returns over this period are equally strong, 3.6 times gross multiple of money and 26% gross IRR across our private equity exits, or four times and 29% across Europe America. But how are we able to consistently deliver these returns and realizations? For me, three factors stand out. First, the upper mid-market size of our investments gives us flexibility. We aren't reliant on the IPO markets to exit. Second, our prudent portfolio marks, which allow us to exit consistently at an uplift. Thirdly, and very importantly, Our ability to drive strong alpha during our ownership, creating high-performing, valuable businesses. On the topic of investment performance, we're seeing very positive operating momentum across our portfolio companies. Over the last 12 months, we have delivered EBITDA growth of 13% across all of our private equity funds and 14% across Europe America's Fund 8. And importantly, this growth is broad-based, as these funds are diversified with typically 30 to 40 investments in Europe-Americas funds. It's also worth noting that value creation includes the markdowns to our limited software exposure, in line with changes in public market valuations in the first quarter. With this value creation, a number of our funds have seen strong progress over the last six months, with Europe America's Fund 8, for example, increasing from 1.5 times from 1.3 times six months ago. As I've said previously, the importance of AI for portfolio companies can't be overemphasized, and we are putting material resources into preparing ours for this enormous technological change. AI will have disruptive effects, but can also be massively beneficial for those who really embrace it This is why we are very much focused on accelerating the adoption of regenerative AI across our portfolio companies to drive further value creation, including by using partnerships with all the major providers. In our investment process, we are also leveraging AI platforms to enhance knowledge sharing and support investment decision making, including for due diligence. We were early adopters taking our whole senior team out to Singularity University on the West Coast in early 2020 to better understand the significance of large language models. Since then, we have fully embedded the AI opportunity and risk lens into our investment committee decisions. More broadly, the strength of our network shows in the breadth of our capital deployment across the platform and the way our teams work together. In the first half of the year, We acquired the animal nutrition and health business of PSM, an investment made possible by the combined efforts of our Benelux, Dak and Chemicals teams. In sports, media and entertainment, where we are a world leader, we acquired the world's largest online chess platform, chess.com, and made an investment in Equine Network, which is the leading North American equestrian sports league. Both investments combine the expertise of our SME sector team with our US platform. In the first half, this led to a deployment pace that remained consistent with a 3-4 year investment cycle, running at a similar level to the prior year, but our healthy pipeline gives us real confidence as we look forward. We have built CBC into one of the world's broadest and most diversified private markets leaders. This breadth is a huge competitive advantage as clients consolidate relationships and are looking for partners who can serve them across multiple strategies, channels and geographies. As you can see on the left of this slide, our four platforms are all in sizeable and very attractive markets. private equity, credit, secondaries and infrastructure. Within each of those platforms, our unparalleled global network of 30 offices and our specialist teams provide the deepest origination funnel in our industry. This is complemented by a highly aligned, very distinctive compensation model and a business that is fully integrated as one CBC. As you can see on the other side of the slide, we are proud to have the highest quality client base and relationships. Our consistent track record of our performance through the cycle has helped us create deep, long-standing relationships with the top LPs in the world. At the same time, our fundraising capabilities continue to broaden and expand across the insurance and private wealth channels. All this means we're extremely well positioned for growth, benefiting from the trends at work in our industry. We're gaining market share on the back of our consistent outperformance and investment appetite for Europe. We're demonstrating strong growth in credit, infrastructure and secondaries. In each case, we're using the power of the CBC network to keep scaling these platforms and broaden them further. including into adjacent products and client segments. In private equity, we are confident in future growth, driven by Fund 10, which we expect to be the same size or larger than its predecessor, which is still the largest private equity fund ever raised. This all underpins our previously guided double-digit TAGA in fee-paying AUM to 2028, and a clear path to a substantial step-up in our earnings in 2028 as we activate Fund10. With that, I'll hand over to Rob to take you through fundraising. Thanks, Rob.