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Clarion Capital closes Fund III at $427 mln

  • Nearly doubles the total raised for Fund II
  • GP has contributed at least 10 pct to each of its funds
  • Firm sees opportunity in media/tech connected to ads

Clarion Capital Partners closed its third fund at $427 million, just above the hard cap, according to people with knowledge of the process.

Fundraising took less than three months, the sources said, with two-thirds of the investors being repeat LPs. Paul Weiss served as legal counsel.

Clarion Capital Partners Fund III is nearly double the size of its predecessor vehicle, which closed in 2013 with $221 million. At least 10 percent of the capital in each of Clarion’s funds was contributed by the GP.

Clarion plans to buy 10 to 12 companies out of the fund, with equity checks ranging $30 million to $40 million. The firm invests in the lower-middle market, targeting business and healthcare services; media, entertainment and technology; consumer; and specialty financial services.

Based in New York, Clarion was founded in 1999 by Marc Utay, a veteran of Wasserstein Perella and Drexel Burnham Lambert, where he worked on leveraged buyouts with Leon Black. Utay invested on a deal-by-deal basis, including buyouts of IMAX and All-Clad Holdings, before Clarion raised its first institutional fund in 2004.

Clarion recently exited its investment in Moravia, a Czech translation-services provider, which it sold to RWS Holdings for $320 million. Clarion acquired a majority stake in the company in 2015. Terms were not disclosed, but the transaction value was below the Hart-Scott-Rodino Act notification threshold of $76.3 million.

Utay, the firm’s managing partner, told Buyouts the market is “about as expensive as any of us have seen,” even more so “by most measures than 2006-2007.”

“We’re finding an awful lot of things to do in the media, entertainment and technology space around data, software, analytics, all tied to the advertising ecosystem,” Utay said.

“Where we see less opportunity is in on-trend consumer,” for instance, premium categories like gluten-free foods. “We found that people are willing to invest earlier and at very high valuations. We like the companies, but we don’t see that the pricing makes sense.”

Action Item: Check out Clarion’s Form ADV here.

Photo of Marc Utay courtesy of Clarion Capital Partners.