Return to search

CD&R considers adding tech focus

  • Firm told LPs may add a focus on tech investments
  • Next fund will be larger than Fund IX, which closed on $6.25 bln
  • Firm has no plans to go public

Clayton Dubilier & Rice is considering adding a new focus to its investment strategy: tech investments.

That’s according to our spy at CD&R’s annual meeting last week. A separate source confirmed our spy’s account.

Adding the tech focus would be similar to what the firm did after the global financial crisis, when it added a focus on financial services, the source said. In the depths of the financial crisis, in February 2009, the firm hired James Hawkes, former chief executive officer and chairman of Eaton Vance as an advisor to focus on investment opportunities in financial services.

It’s not clear if the firm has brought on professionals to focus on tech investments. Anthony Feldman, a spokesman for CD&R, declined to comment.

Tech is an increasingly popular sector for certain private equity firms, some of which have found success and grown. Tech experts in private equity include Vista Equity Partners, Thoma Bravo, Silver Lake, Spectrum Equity as well as larger, multi-focused firms like Kohlberg Kravis Roberts and TPG.

CD&R currently focuses on sectors including consumer/retail, healthcare, industrials and business services, according to the firm’s website. It’s not clear if the firm still targets investments in financial services.

The firm, which was launched in 1978, will likely raise a fund that is larger than the prior fund, the source said. Clayton Dubilier & Rice Fund Fund IX closed on $6.25 billion (including a GP commitment) last year.

While CD&R is focused on growth, it has no plans to go public, the firm told limited partners at the annual meeting, according to our source. CD&R said “the firm will not go public or become a diversified multi-asset class manager,” the source said.

The biggest risk to the firm, the source said, “is whether they can drive alpha and continue to win with a large and growing fund size.”

Photo courtesy of Reuters