Sovereign announces the exit of CMGL generating 3.3 x money and 260% IRR

Sovereign Capital Partners LLP ("Sovereign Capital"), the UK private equity buy & build specialist, has realised its entire investment in CMGL Group Limited ("CMGL"), the specialist provider of outsourced claims and insurance management services, through a £32m sale to The Capita Group Plc ("Capita"). This transaction has generated an IRR of 260% and represents a return of 3.3x money invested for Sovereign Capital's investors.

CMGL was acquired by Sovereign Capital in August 2005 through a buy-out from Zurich Financial Services. The business handles a range of insurance run-off services for a number of FTSE quoted companies, general insurers, Lloyd's underwriters and London Market companies.

The sale of CMGL marks the first exit from Sovereign's second fund (Sovereign Capital Limited Partnership II) a £275m fund raised in 2005. It follows on from the successful exit of the SENAD group in July 2006 from Sovereign Capital Limited Partnership I, which generated returns of 6x money and an IRR of 110%.

Philip Conboy, Director at Sovereign Capital, commented:

"We have enjoyed working with CMGL's management team to develop CMGL into the disciplined stand-alone business it is today. Capita provides a strong fit and we are delighted with the result." 

Jerry McArthur, Managing Director of CMGL said:

 "Being an integral part of a FTSE100 company allows us to offer a wider portfolio of bespoke services and solutions.  It also fundamentally enhances our capacity to support the London Market and all our clients with large scale business transformation."