Clearlake Follows Its Chelsea Deal With A $14.1 Billion Buyout Fund


Earlier this month, Clearlake Capital played a key role in one of the biggest sports deals ever. Now, the Santa Monica-based buyout firm has closed its biggest fund yet.

Clearlake wrapped up fundraising for its seventh flagship vehicle with $14.1 billion in commitments, doubling the size of its predecessor, which closed on about $7 billion a little more than two years ago. This is the second largest buyout fund in the U.S. so far this year, trailing a $19 billion effort from KKR

KKR
that closed in April.

The formal close comes about two weeks after Clearlake agreed to buy a major stake in Chelsea FC as part of a high-profile auction for the West London soccer club. Clearlake provided much of the financing for a victorious group led by billionaire Todd Boehly, with Sky News reporting the firm will own about 60% of the team’s shares. Multiple reports have indicated that voting rights will be split equally between Clearlake and the rest of Boehly’s group.

Clearlake is part of new generation of private equity powers that emerged in the 2000s and are now raising the sorts of massive capital pools that used to be the domain of long-established firms like Blackstone

BX
and Apollo Global Management

APO
. Founded in 2006 by Jose E. Feliciano and Behdad Eghbali, it now manages some $72 billion in assets, with most of its dealmaking focused on the tech, industrials and consumer sectors. Chelsea marks its first foray into pro sports.

Both Feliciano and Eghbali have a current net worth of $3.4 billion, according to Forbes, placing them among the world’s 1,000 wealthiest people.

Clearlake has ascended into the upper echelons of private equity fundraising with some serious speed. Just seven years ago, the firm closed its fourth flagship fund on $1.38 billion. But it roughly doubled that size with each of its next three vehicles, climbing to $3.6 billion in 2017 and about $7 billion in 2020. This week’s new fund blew past an initial target of $10 billion.

The firm believes that demand is due to the success of its past two funds. Clearlake claims a 57.7% net IRR for its fifth flagship fund and a 78.8% net IRR for its sixth vehicle.

When 2022 began, there was talk that it could be a record-setting year for private equity fundraising, with firms seeking to refill their coffers after a spending spree for the ages in 2021. But the tides have turned. A slumping stock market means many LPs don’t have as much capital to pump into PE as predicted, for fear of growing overexposed to the asset class. And with so many firms seeking to raise funds, LPs have plenty of options. Bloomberg reported last month that Blackstone, Apollo and TPG are all offering investors the option to delay commitments to their latest flagship funds until 2023.

Clearlake, though, didn’t wait around. And it’s already been busy putting its new pool of capital to work. The firm has deployed its seventh fund for a $2.6 billion takeover of Intertape Polymer Group, a reported $5.4 billion acquisition of Quest Software and a half-dozen other deals to date.

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