Without much publicity and no help from a placement agent, Old Greenwich, Conn.-based Clearview Capital LLC managed to raise $46 million so far for a new buyout fund. Clearview Capital Equity Fund II, which will be capped at the end of June, is expected to close with between $60 million and $75 million.
Coming from James Andersen, managing director of Clearview Capital, the fund-raising process sounds more like cleaning up the toys before you can have ice cream than a part of the game. “We’re not fund raisers,” he said. “What we really want is to go do deals. It was a way for us to tell our investors, Look, for six months we’re going to formalize something,’ and if they’re not in, they’re not in, because only people that commit are going to have the opportunity to invest and co-invest.'”
Whatever its method, Clearview Capital has been able to attract the attention it needs. The fund launched last fall, and held its first close on $40 million at the end of December. Since then another $6 million has been committed to the fund and at least $14 million more is expected. Additonally, Andersen warned that the size of the fund should not mislead people about the deals they can handle. “[Our investors] are already willing and able to co-invest on top of this [fund’s capital],” said Anderson. “So we can do bigger deals than it sounds like when you talk about a $60 million to $75 million fund.”
Clearview will seek to invest in deals with no less than $4 million in operating profit. Anderson said Clearview targets $5 million to $20 million in operating profit and deal size between $20 million and $100 million. However, he said that one of the three deals already completed by the firm, the buyout of Compression Polymers, was a $155 million deal.
The investors in the fund, many having previously co-invested with Clearview, are made up of a number of high-net-worth individuals and one family partnership with an investment arm. “They know us, and they trust us,” said Andersen. “The fact is, we look at them as a real competitive advantage for us because all these people are very successful and have great relationships, and they’re all willing to lend them to us when it’s appropriate.”
The firm’s first pool of capital, Clearview Equity Fund I, was a less formal fund that included many of the same investors. With that fund, Clearview invested in three companeis. The first, in June 2000, was the $27.5 million buyout of VIA Inc., a small Nevada-based furniture business with approximately $20 million in sales. In March 2001, the firm bought Compression Polymers Group, a Penn.-based manufacturer in a $155.5 million transaction, where Clearview co-invested with Whitney & Co. In September 2001, Clearview purchased American Furniture Manufacturing, based in Pontotoc, Miss., for $35 million.
Clearview is already looking into several possible transactions for its second fund and will make an investment as soon as the opportunity presents itself. “The money’s ready to go,” said Andersen.