CVC And Its Leveraged Investments In AI

 

CVC Capital Partners, CVC, the leading European private equity, private credit, secondaries and infrastructure asset manager has invested large part of its newly raised private equity, private credit, secondaries and infrastructure assets into artificial intelligence, AI related technology companies, AI related energy companies, and AI data center infrastructure projects.

Much of the private credit raised by CVC goes to fund loans for leveraged buyouts of technology companies. Leveraged buyout deals are leveraged since alternative asset managers like CVC secure around 30 % of the funds needed to buy out the technology firm in equity and the rest is borrowed by bank lending or high yield bonds.

CVC and most other leading technology companies use the private credit funds they have raised to fund the leveraged buyout debt portion. This puts additional leverage in the technology buy out deals. Many of the technology companies CVC and other leading private equity firms invest in are AI companies.

Finally, like most technology investments AI companies are operationally leveraged, because AI and technology in general insures high scalability without billions of USDs in initial investments in land, factories and infrastructure.That said, AI has recently become quite a capital intensive business, since to run and produce AI Microsoft, Alphabet, Amazon and Meta have each invested  30 billion USDs in 2025 only in AI data center and cloud computing related infrastructure.

So, CVC is double if not triple leveraged in its investments in AI technology companies via its private equity, private credit, secondaries and infrastructure funds. This large leverage magnifies gains but also increases losses multiple fold on the downside for CVC's investments.

In an AI positive case CVC's market capitalization could rise to 45 EURs. However, if the AI booms turns into bust and drags the Nasdaq 65 % from its peak, CVC's market capitalization could fall to 8 billion EURs from CVC's current 15.94 billion EUR market capitalization, according to Wolfteam Ltd.'s projections and estimates.