CVC Credit Partners European Opps

Restructurings starting to bear fruit

10 March 2020

CVC Credit Partners European Opportunities (CCPEOL) achieved an NAV return of 3.1% in sterling and 1.6% in euro terms in FY19. The investment vehicle through which CCPEOL invests achieved a gross return of 2.9% (in euro terms), behind its target of 8–10% per year. This was largely due to several restructuring processes within the credit opportunities pool taking longer than expected. However, these have shown good progress recently and, together with prospective new credit investment opportunities, now offer further upside potential for 2020. Meanwhile, the performing credit holdings delivered solid returns as the investment manager was able to profit from the recent ‘flight to quality’ in credit markets. MORE »

Actively working on credit opportunities

28 January 2020

CVC Credit Partners European Opportunities (CCPEOL) aims to achieve a blend of capital growth and income (it targets gross total returns pre fees of 8–12% pa, with c 5pp from income). It maintains two pools of assets – performing credit with assets acquired close to par and credit opportunities consisting of discounted assets. CCPEOL’s one-year NAV total return (to 10 January) was a modest 3.4% for the sterling shares and was assisted by positive returns in November and December. Throughout most of the year, performance was driven by the performing credit bucket. In turn, credit opportunity returns were muted as the company was working on a number of restructuring processes that we understand started to bear fruit at the end of 2019. MORE »

Defensive positioning and solid dividend cover

8 August 2019

CVC Credit Partners European Opportunities (CCPEOL) aims to achieve a blend of capital growth and income (it targets gross total returns of 8–12% pa, with c 5pp from income). The portfolio is positioned defensively, mainly in senior secured debt of large issuers (average EBITDA above €500m) from Western Europe. Long-term NAV net total return (TR) performance remains broadly intact at 6.4% pa over three years (vs SP ELLI at 3.5% pa), despite weaker performance during the Q418 downturn. Currently both share classes offer a dividend yield in excess of 5%, largely covered by coupon income according to our estimates. MORE »

Credit expert with 5% yield and growth potential

5 February 2019

CVC Credit Partners European Opportunities (CCPEOL) aims to achieve a blend of capital growth and income (target total returns of 8–12% pa, with c 5pp from income) by investing in high-yielding debt instruments such as senior secured loans and sub-investment grade bonds. The portfolio is biased towards large, liquid issuers (€600m weighted average EBITDA) in Western Europe, although up to 40% may be allocated to non-European markets. The underlying investment vehicle holds a blend of investments in performing credit, where returns come mainly from income, with a credit opportunities portfolio made up of discounted assets that offer higher yields and the potential for capital growth. CCPEOL’s performance since launch in 2013 has been solid, although the broad-based sell-off in late 2018 has affected returns more recently. The fund has sterling (CCPG) and euro (CCPE) share classes, which have tended to trade close to NAV, and currently yields just over 5%. MORE »

Seeking opportunities in leveraged credit

19 March 2018

CVC Credit Partners European Opportunities (CCPEOL) seeks to achieve gross returns of 8-12% a year by investing in a portfolio of high-yielding debt investments with a bias towards Western Europe. The majority of the portfolio is in floating rate, senior secured loans, which, while rated below investment grade, rank higher in the capital structure than equities or bonds. The strategy blends performing credit, where returns come mainly from income, with more opportunistic investment in credits that are priced below par, offering a yield pick-up as well as capital growth potential. In spite of sustained strong issuance and refinancing, which puts downward pressure on yields, the managers see opportunities from accelerating disposals of non-core assets by banks, industry dislocations in areas such as retail, and expected periods of volatility around interest rate rises. MORE »

Seeking opportunities in leveraged credit

19 March 2018

CVC Credit Partners European Opportunities (CCPEOL) seeks to achieve gross returns of 8-12% a year by investing in a portfolio of high-yielding debt investments with a bias towards Western Europe. The majority of the portfolio is in floating rate, senior secured loans, which, while rated below investment grade, rank higher in the capital structure than equities or bonds. The strategy blends performing credit, where returns come mainly from income, with more opportunistic investment in credits that are priced below par, offering a yield pick-up as well as capital growth potential. In spite of sustained strong issuance and refinancing, which puts downward pressure on yields, the managers see opportunities from accelerating disposals of non-core assets by banks, industry dislocations in areas such as retail, and expected periods of volatility around interest rate rises. MORE »

Income and growth from credit portfolio

14 July 2017

CVC Credit Partners European Opportunities (CCPEOL) seeks returns of 8-12% a year by investing mainly in high yielding sub-investment grade loans. A focus on senior secured assets mitigates the higher risk from lower credit quality. The bias to floating rate credits means rising interest rates should be a benefit rather than a drag. The portfolio is split roughly 50/50 between performing credit, where returns come mainly in the form of income, and credit opportunities, where assets are priced below par and thus offer potential for capital appreciation and downside protection due to the discounted price. There are relatively few alternative ways for individual investors in Europe to access the senior loans market, since loans are not permitted investments in open-ended UCITS funds. Sterling and euro share classes are available, and a recent placing of treasury shares has increased the market cap of each class by £77.55m and €13.87m, respectively. MORE »