Clearlake raises a $14.8B fund
Thoughts? Pretty impressive in this environment
https://www.wsj.com/pro/private-equity/clearlake-raises-14-8-billion-fo…
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but WSO told me they sucked!?
If you just go to their website and list out their held investments, more than half of them have debt at distressed levels. Their fundraise is literally posted in the WSJ bankruptcy section. They are going to have one of the worst fund vintages ever but kudos to whatever flashing lights they were able to put in front of the LPs to get them to resubscribe
It's an AUM game
Returns are heavily luck driven. Look at TA, Thoma, and the other software funds that were known to be the best 5 years ago - how are they faring now?
Does this include their CVs?
IR team belongs in the HoF
good for them. the 14.8b is obviously huge $ but wonder how much of that is fee earning at full rack rate... between the coinvestors, gp commit, retail channel, potentialy CVs. the headline number is surely inflated.
but, still good for them.... my fund could never..
Well you're right, press release says: "Clearlake Capital Partners VIII (“Fund VIII”), alongside related co-investment vehicles and separately managed accounts. Together, these vehicles represent $14.8 billion of capital commitments."
Fund VIII is probably billions below the $14.8bn. Their target was $15bn and took them 3 years to close fundraising well below target...
LPs are honestly complete clowns.
Right I am sure that the keyboard warriors on WSO have better information and are better fund investors than LPs.
Greatest IR team on the street and it isn't close.
IR team succeeded in “putting lipstick on a pig”
I audibly said what out loud in the office reading this lmao
building upon that,
what do you think of capital raising / ir as a career?
Let's parse this: last fund at 14.1bn in 2022 - that is 16.15bn in 2026 dollars, new fund is a down fund in real terms regardless of how you spin it.
Their release explicitly mentions that the figure includes SMAs, co-investment vehicles, etc. e.g. the stuff that sits outside the main GP vehicle and pays little/no fees (for releases announcing previous funds this was of course not included). You can also bet your ass they had to go heavy on the GP commit & they included it (some funds don't count it towards announced fundraising figures, because it pays no fees). Essentially, they jacked up the numbers as high as they could, and still ended up with a down round in real terms.
Target was 15bn initially (hard-cap), assumes this is without co-invest, SMAs, etc. so they are well below. Fundraising started in June 23, this is over 3 years. Bulk of the commitment could have happened before people knew Fund VII was going to suck balls for sure (e.g. June 23 - June 24).
Overall this is pretty much a shit outcome, deservedly so given performance. Next fund is going to be even better, since it will be built upon Fund VII's non-existent DPI.
This is a good diagnosis. I would bet actual fee paying 2 and 20 capital is less than $10B out of the total.
And all of the fee paying portion was likely raised prior to q1 with saaspocalypse being the nail in the coffin.
they probably raised 80% in the first year, and then 20% in the next two - same with a bunch of funds that closed in 2023/2024 (they all raised 80% in H1 2022 and then had to fight for every single dollar afterwards, dragging on the fundraise over the full period of 2 years allowed)
Honest question: does anyone know if these megafunds are ever raising at discounts to 2/20? I blindly thought that PE hadn't suffered the same fee drift that happened in non-pod HFs but recently learned that a $10bn plus PE fund had mostly heavily discounted fee investments (more like 1/10). They have distressed credit roots so possibly not fair to extrapolate. But they are also a fund that I thought had been doing well given the cadence of asset gathering. Learned that much of it was: invest in the subsequent fund and we will give a meaningful discount or even a net back on the fund being harvested. I was quite surprised - curious if anyone has heard of this elsewhere.
It’s easy to shit on them here in true WSO fashion, but they have ~15bn to invest and will live to fight another day. A far better position than some others who have raised their last fund (either knowingly or unknowingly).
Agree, but this is their last fund, and we know it
I think the point is that they don't have $15B to invest. A bunch of that # is tied up in CVs and another large chunk is GP commit (which I guess they have to invest, but it's their own money).
I'm not defending Clearlake, but it's just straight up factually incorrect to include their CVs in the Fund VIII amount. The CVs are separate and no one would lump together. Especially since all but one of them was raised pre-Fund VIII's fundraising period.
You are right that they had to increase their GP commit meaningfully for this fundraise. This was reported in the press.
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