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Message: <blockquote data-quote="LionHeart" data-source="post: 148670" data-attributes="member: 27791">News Story: CVC/DIF Infrastructure dealCVC has acquired a significant stake in Dutch infrastructure fund DIF Capital Partners for about €1bn. There are good reasons for the acquisition, particularly to diversify CVC's portfolios. Returns from infrastructure do not tend to correlate with bonds and other equities.However, I think the major driver is increasing AUM (assets under management). AUM in infrastructure has expanded at a 17.8% compound annual rate in the decade to 2022. DIF has €16bn of AUM, bulking up CVC’s own €140bn AUM.This is an interesting move, as the Private Equity firm announced its plans to go public again in mid-August. For a firm with a "kill-what-you-kill" profit distribution model for dealmakers, an IPO raises the possible issue of a conflict of interest.<ul> <li data-xf-list-type="ul">Limited Partners (LPs) are purely concerned with profitable deal-making; hence, the rumination for dealmakers to maximise profits lines up incentives with LPs really well.</li> <li data-xf-list-type="ul">Shareholders, on the other hand, would be concerned with the size of AUM. This is because they would be paid out by the management fee the PE firm charges.</li> </ul>This acquisition arguably prioritises potential shareholder interests to have as successful as possible an IPO. This is further demonstrated by how CVC will not fully own the group until 2028.LPs, though, do not appear deterred as CVC in July was able to raise a record-breaking €26bn ($29bn) for the largest PE fund in history. This is despite rivals such as Carlye, Blackstone, and Apollo Global cutting targets in such a turbulent macroeconomic environment.How might this impact Law firms?CVC moving away from its traditional buyout strategies demonstrates a trend of shifting towards multi-strategy approaches. I think this might force Law firms to adapt by providing a more full-service offering, especially in regard to industry and sector expertise, as PE firms' targets and strategies change.</blockquote>

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