| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 61.10 | -49 |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | n/a | |
| Graham Formula | n/a |
CVC Income & Growth Limited (LSE: CVCG.L) is a Jersey-domiciled closed-ended fixed income mutual fund specializing in sub-investment grade senior secured debt obligations across Western Europe. Managed by CVC Credit Partners Investment Management Ltd., the fund operates as a fund-of-funds, primarily investing in CVC European Credit Opportunities S.àr.l. Its diversified sector exposure targets high-yield opportunities while benchmarking against key indices like the S&P European Leveraged Loan Index and iBoxx EUR Liquid High Yield Index. Formerly known as CVC Credit Partners European Opportunities Limited, the fund has been active since 2013, offering investors access to European credit markets with a focus on income generation. With a market cap of approximately £163 million, CVCG.L appeals to income-focused investors seeking exposure to non-investment grade European corporate debt, leveraging CVC Credit Partners' expertise in credit markets.
CVC Income & Growth Limited presents a niche opportunity for investors targeting European high-yield debt with a focus on income generation. The fund's 8.18p dividend per share (as of latest data) and zero debt balance sheet underscore its income-oriented strategy. However, its narrow focus on sub-investment grade European credit exposes it to sector-specific risks, including economic downturns or liquidity crunches in leveraged loan markets. The fund's low beta (0.17) suggests relative insulation from broader market volatility, but this also implies limited upside during bullish credit cycles. With no capital expenditures and stable operating cash flows (£22 million), the fund appears well-positioned to maintain distributions, though its small cash position (£1.6 million) warrants monitoring in volatile markets. Investors should weigh its 12.6% net income margin against peer funds in the European high-yield space.
CVC Income & Growth Limited differentiates itself through its exclusive focus on European senior secured loans, a segment less saturated than unsecured high-yield bonds. The fund's fund-of-funds structure provides diversification benefits but introduces an additional layer of fees, potentially eroding returns compared to direct credit strategies. Its benchmark alignment with multiple indices (S&P European Leveraged Loan, iBoxx EUR HY) demonstrates a blended approach to credit investing, though this may dilute outperformance opportunities. The fund's competitive edge lies in CVC Credit Partners' proprietary deal flow in European middle-market lending, where informational asymmetries can create pricing advantages. However, its AUM of £163 million is modest compared to pan-European credit peers, limiting economies of scale in fund operations. The zero-debt capital structure is conservative but may represent a missed opportunity for leverage-enhanced returns in a low-rate environment. While its sector-agnostic approach reduces concentration risk, it also means the fund lacks specialized credit underwriting expertise in specific industries.