Clairvest closes sixth mid-market fund at $1.1 bln hard cap

Clairvest Group held the first and final close of its sixth mid-market fund, securing about $1.1 billion (US$850 million) in committed capital.

Clairvest Equity Partners VI, the largest fund in the Toronto private equity firm’s 32-year history, reached its hard cap after less than four months of fundraising, according to a news release. Its original target was US$800 million.

Clairvest, a listed firm, was CEP VI’s largest investor, committing US$230 million alongside US$620 million from limited partners.

The LPs were not identified. Prior Clairvest funds were backed mostly by North American institutional investors, such as pension systems, insurers and family offices.

Last October, Vice Chairman and Managing Director Jeff Parr and President and Managing Director Michael Wagman told PE Hub Canada Clairvest intended to expand its investor base to include more institutions, especially from the United States.

Metric Point Capital was the placement agent.

CEP VI will succeed Clairvest Equity Partners V, which raised $600 million in 2014.

Michael Wagman, president and managing director, Clairvest Group.

The new fund will maintain Clairvest’s longstanding strategy. It will typically acquire minority stakes in companies with Ebitda of up to $50 million in such sectors as business services, equipment rentals, gaming, IT services, media and waste management.

This focus reflects Clairvest’s core domain approach to investing, which puts a premium on businesses capable of becoming dominant or strategic players in their sectors.

As reported by PE Hub Canada in October, the launch of CEP VI gained momentum from a recent series of lucrative exits.

Liquidity events included last month’s sale of Rivers Casino, a Des Plaines, Illinois gaming and entertainment complex, to Churchill Downs. The deal, valued at US$1.45 billion, awarded Clairvest with 8.4x invested capital and an IRR of 46 percent.

Over the past 25 years, Clairvest reports earning a 3.6x gross multiple of invested capital, resulting in a 24 percent pooled gross IRR on realized and substantially realized investments.

In 2017, Clairvest announced changes in top management, including the transition of PE veteran Parr to vice chairman from co-CEO.

Wagman was promoted to president, entitling him to a board seat.

CEO and Managing Director Ken Rotman continues to lead the firm.