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Clearlake targets $2.5 bln for Fund V

  • Clearlake V will likely be oversubscribed
  • Previous two funds netting IRRs in excess of 35 pct
  • Specializes in software/technology, energy, more

Clearlake Capital Partners is targeting $2.5 billion for its latest flagship fund, which will likely be oversubscribed, according to an LP with knowledge of the fund.

While the hard cap remains undetermined, strong demand could push Fund V as high as $3.5 billion or $3.6 billion, sources with knowledge of the fund said.

New York State Teachers’ Retirement System earlier this month committed up to $150 million to the fund, pension documents show. The system will likely close its commitment next month.

When the firm expects to hold a final close on Fund V is unclear, but Clearlake has held speedy fundraises. The firm capped its previous fund on $1.38 billion in 2015 after just three months on the market. Fund III exceeded its original $750 million hard cap when it closed on $785 million in 2013.

California Public Employees’ Retirement System reported its Fund IV commitment was netting a 36.9 percent internal rate of return as of the end of last year. Fund III was netting a 35.8 percent IRR as of the same date.

A separate vehicle for non-control investments, Clearlake Opportunities Partners, was netting a 5.3 percent IRR as of year end, according to CalPERS. The fund raised more than $600 million and is marked as a 2015 vintage.

Clearlake specializes in software/technology, industrial, energy and consumer sector investments, with the ability to invest in both traditional buyouts and special situations.

The firm completed several exits over the past year, including a combined sale of Syncsort and Vision Solutions to Centerbridge Partners for $1.26 billion. The firm last month announced the sale of portfolio company Calero Software to Riverside Partners.

Clearlake, along with Valor Equity Partners, StepStone Group, Palladium Equity Partners and MoonSail Capital, recently launched an initiative to raise $10 million for relief efforts in Puerto Rico, which was devastated by Hurricane Maria earlier this year.

Clearlake was founded in 2006 by Steve Chang, Behdad Eghbali and José Feliciano. Chang left the firm in 2015 on amicable terms.

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Photo of José Feliciano courtesy of Clearlake. Buyouts Archive.