Clearlake launches next flagship, expects to exceed target on first close

Clearlake Capital Group is poised to raise $7 billion for its next flagship fund that only hit the market this fall, three sources told Buyouts.

Clearlake Capital Partners VI launched targeting $5 billion with a $7 billion hard cap, according to one of the sources.

Fund VI is set to hold a first close in December on more than $5 billion, the source said.

Final close should come in the first quarter, the second source said. The fund could ultimately be slightly over $7 billion including GP commitment.

At just over $7 billion, Fund VI would represent a major jump from the size of Fund V, which closed on more than $3.6 billion last year.

Clearlake, led by José Feliciano and Behdad Eghbali, was formed in 2006 to invest in sectors like industrials, energy, software, tech-enabled services and consumer. The firm sold a minority stake in its management company last year to Dyal Capital, Goldman Sachs Asset Management and Landmark Partners.

Performance is a factor in helping drive Clearlake’s fundraising. Fund V was generating a net internal rate of return of 63.8 percent as of June 30, 2019, a person familiar with the firm said.

Fund IV, which closed on $1.38 billion in 2015, was producing a 31.8 percent net IRR as of the same date, the person said.

And Fund III, which closed on $785 million in 2012, was generating a 41.6 percent net IRR as of the same date, the person said.

The firm also closed its second non-control fund, Clearlake Opportunities Partners II, on $1.4 billion in June, according to a statement from the firm.

Last month, Clearlake and TA Associates closed their investment in DigiCert Inc, which provides security services for identity and encryption.

Update: This story was updated to include additional information about hard cap and timing on Fund VI. Also, the date of the final close of Fund III was changed to 2012. 

Action Item: Check out Clearlake’s Form ADV here: https://bit.ly/32XTZsh