Private equity firm CVC's 'significant' profit beat drives shares up

By Alban Kacher and Mateusz Rabiega

(Reuters) -Private equity firm CVC Capital Partners reported stronger than expected annual profit on Thursday, supported by a jump in management fees.

CVC, whose 2.3 billion euro initial public offering marked one of the biggest debuts in Europe last year, reported a 36% rise in its adjusted after-tax profit to 830 million euros ($904 million) in 2024, beating the average of 748 million euros expected by analysts polled by the company.

The stock pared gains after rising as much as 4.8% in early trading.

Following a strong 2024, CVC aims to accelerate growth in the Wealth and Insurance segments, which are the group's primary focus now, CFO Fred Watt said in a call with analysts.

The group raised over 15 billion euros of capital from insurance clients in the last five years and launched a dedicated insurance solutions team, allowing it to capture a "significant opportunity", said analysts at Citi.

CVC's realisations, or sales of investments in portfolio companies, jumped to 13.1 billion euros, up 114% from 2023.

The group expects realisations this year at, or slightly above, 2024 levels.

"The realisations are clearly up very materially over 2023, but (...) we are still below our long-term average level of realisation," CEO Robert Lucas said in a call with journalists.

As operating expenditures grew more slowly in 2024 while investments accelerated, CVC expects costs to increase more this year than last, Watt said.

Management fees for the year jumped 23% to 1.33 billion euros, the group said, adding it expected further "strong" growth of earnings from management fees in 2025.

($1 = 0.9184 euros)

(Reporting by Mateusz Rabiega and Alban Kacher in Gdansk, Editing by Louise Heavens, Tomasz Janowski, Alex Richardson and Kevin Liffey)