Against the grain: Clairvest hits Fund VII target inside three months

While many GPs are taking longer to raise funds, Clairvest reached the $1 billion target set for its seventh flagship offering in less than 70 days.

Launched in late April, Clairvest Equity Partners VII met the goal in a first close on June 30. Eyeing a hard-cap of $1.2 billion, the firm will continue fundraising, a spokesperson told Buyouts, with a subsequent closing expected this summer.

Clairvest is among a few private equity shops raising capital quickly at a moment when many GPs are forced to extend timelines due to tough supply conditions. In the first quarter, sponsors took an average of 13.4 months to wrap up funds, well above annual averages stretching back to the financial crisis, Buyouts reported.

GPs moving at a more expeditious clip have attributed this to several factors, such as tight LP relationships, solid performance and consistency in strategy and leadership. These are also relevant in Clairvest’s case.

As Fund VII was not widely marketed, its first close benefited from a “strong existing investor base,” the spokesperson said. Returning LPs, mostly North American endowments and foundations, family offices, insurers and pension systems, made up roughly 80 percent of third-party capital.

Clairvest, a listed manager with a substantial balance sheet, also committed $300 million to the $1 billion secured, according to the spokesperson. As with prior flagships, the GP will be Fund VII’s single largest investor.

In addition, “we’ve stuck pretty close to our strategy,” the spokesperson said, led by a senior management team that has worked together for more than two decades.

Clairvest makes minority investments of up to $100 million in mid-market companies with EBITDA of up to $50 million. Targets are in sectors like aerospace and defense, environmental services, equipment rentals, facility services, gaming, insurance, IT services, life sciences services, media, medical practice management and renewables.

The firm reports earning a 4.2x gross multiple and a 25 percent gross IRR on 41 realized and significantly realized investments since inception. Fund VI, closed in 2019 at $850 million, was as of March earning a 1.4x gross multiple and a 28 percent gross IRR.

One sector in which Clairvest has played a pioneering role is gaming, such as casinos and racetracks. As of March, realized investments in this space were generating a 5.7x gross multiple and a 47 percent gross IRR, PE Hub reported.

Deals done this year include a 15^th gaming investment. Clairvest partnered with horse-racing property owner ECL Entertainment to acquire gaming assets for a new operation in southern New Hampshire.

Other recent activity includes an investment alongside Morgan Stanley Private Equity Secondaries in Top Aces, an advanced airborne training provider to the armed forces of NATO allies.

Founded in 1987, Clairvest is led by CEO and managing director Ken Rotman and president and managing director Michael Wagman. They oversee a Toronto-based team of more than 40 professionals.