Clearlake targets $15bn for its eighth flagship fund

Clearlake Capital Group is seeking $15 billion for its eighth flagship fund, breaking a streak where the manager doubled the size of funds it brought to the market.

Since its fourth flagship in 2015, Clearlake has closed a new fund every two years, with each one roughly twice the size of its predecessor. Fund VIII’s $15 billion target is only a 6.3 percent increase from Fund VII’s $14.1 billion in 2021 – a sign of the times as managers have curbed their ambitions during a sluggish fundraising environment.

The target size and other details about Clearlake Capital Partners Fund VIII were included in San Antonio Fire & Police Pension Fund investment committee documents, which were reviewed by Buyouts.

According to the documents, Clearlake will charge Fund VIII investors a 1.65 percent management fee on both committed and invested capital. The fund will have a 20 percent carried interest rate after an 8 percent preferred return.

Fund VIII has a European waterfall structure, the documents said. However, Clearlake can also take an advance of up to 10 percent of carried interest for each realized investment, the documents said.

The eighth fund’s first close is expected later this year and will likely be in the market through the first quarter of 2024, according to pension documents.

Fund VIII will have an investment period of six years and a fund term of 10 years, the documents noted.

Fund VIII will make between 18 and 22 core investments with average check sizes between $500 million and $1 billion, according to San Antonio Fire. Companies will have an enterprise value between $1 billion and $3 billion with approximately $90 million in EBITDA.

Some of Clearlake’s most notable investments include Chelsea Football Club, Discovery Education and Wellness Pet Company.

Clearlake’s previous flagship funds have performed well, according to San Antonio Fire. The 2015 vintage Fund IV has a net IRR of 30.5 percent, the 2017 vintage Fund V has a 42.7 percent net IRR and the 2019 vintage Fund VI has a 28.9 percent net IRR.

Buyouts data also shows that Clearlake’s second, third, fourth and fifth funds have generated positive cashflow for their LPs.

Clearlake did not return a request for comment by press time.