CVC Capital faces exit pressure over Recordati stake as private equity resale model strains

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CVC exit pressure on Recordati

Highlights

CVC's Fund VII holds a 47% stake in Recordati SpA since a 2018 deal, yet has been unable to execute a straightforward exit.
The Recordati situation highlights European private equity's difficulty completing formal exits for aging assets, affecting fund life cycles and capital returns.
In 2024, sale talks for Recordati produced no formal transaction, leaving CVC reliant on internal transfers that raise scrutiny over valuation and self-dealing.

Recordati holding highlights exit challenge

As first reported by Bloomberg News, CVC's Fund VII holds a 47% stake in Milan-listed drugmaker Recordati SpA after a 2018 deal with the founding family. The investment has performed well, but CVC has yet to secure a straightforward disposal of the asset.

The case underscores a broader private equity practice of moving mature assets into another buyout fund, often managed by the same firm, when a traditional buyer does not emerge. That strategy can help extend ownership timelines, but it also raises concerns about self-dealing and valuation when the seller and buyer are closely linked.

Industry implications for European buyout firms

Recordati's situation illustrates the pressure on European private equity groups to find exits for older investments in a market where formal transactions can be difficult to complete. For firms managing aging assets, delays in selling can affect fund life cycles, capital returns and investor expectations.

There were sale talks in 2024, but no formal transaction materialized. The lack of a clean outcome leaves CVC facing the same industry-wide question of how to monetize successful assets when external demand is insufficient and internal fund-to-fund sales risk deeper scrutiny.

In our earlier article, we covered how Equites Property Fund lifted its interim distribution after accelerating its exit from the UK and recycling proceeds into South Africa. We noted that the £200.5 million Aviva portfolio sale helped cut leverage and boost liquidity, giving Equites more capacity to fund domestic logistics growth while it continues to sell its remaining UK properties.

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