ClearLight Partners has raised $300 million with its third fund, according to founder and managing partner Michael Kaye and an SEC filing.
Unlike other private equity firms that sometime spend more than a year finding investors, ClearLight didn’t have as rigorous of a fundraising. The Newport Beach, Calif.-based PE firm has only one LP, Secom Co., of Tokyo. Secom, which produces commercial and residential security products like home camera systems and sensor lights, has $10 billion in revenue and has funded all of ClearLight’s three funds, Kaye says. Each pool has raised $300 million with its second fund closing in 2007. ClearLight began talks with Secom about Fund III last year, Kaye says.
“We’re very fortunate to have a less complicated fundraising situation than some folks do,” Kaye says. “It does require time and effort, but we didn’t have to make pitches to 50 institutional investors.”
Kaye is the former president and CEO of Westec Security, where he spent 15 years. He first met Makoto Lida, Secom’s founder, in 1981 when he was an attorney at Gibson, Dunn & Crutcher. Kaye represented Secom in their first U.S. acquisition, he says. He then became head of Westec, a Secom unit, in 1985. In 1998, Secom sold the Westec business, as well as other units, and used the proceeds to form ClearLight.
With Kay as the head, ClearLight was launched in 2000. The firm’s first fund collected $300 million. Kaye made it clear to peHUB that Secom behaves as a traditional LP and has no say on deals. ”We make all the investment decisions,” Kaye says.
ClearLight focuses on companies in specialty manufacturing, services businesses, as well as consumer products and services. The PE firm typically invests $10 million to $50 million equity per deal and targets companies with $5 million to $20 million in EBITDA. In June, ClearLight acquired Consumer Safety Technology, which makes the Intoxalock breath alcohol monitoring devices. Intoxalock’s technology prevents a car from starting if the driver has a breath alcohol limit over a certain level, Kaye. Users also breathe into the device as they drive and if their breath is over the limit, in some states “the horn start honking,” Kaye says.
The PE firm has had successes. In 2008, ClearLight sold U.S. Education, a provider of post-secondary education now known as Carrington Colleges Group, to Devry. The deal produced an IRR in the mid-20s and ClearLight’s cash-on-cash return for the deal was 3x, Kaye says.
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