Clayton Dubilier & Rice Preps $20 Billion Fundraising Pitch
The firm is looking to raise a new buyout fund, sources say, after wrapping up a predecessor fund with $16 billion in February 2021
Clayton Dubilier & Rice is returning to the fundraising trail with a new buyout fund nearly a year after wrapping up its predecessor with approximately $16 billion, according to four people familiar with the fundraising efforts.
The firm has begun talking to investors about its next buyout fund and plans to raise at least $20 billion for the offering, these people said. If the firm reaches the target, the fund would be around 25% larger than its predecessor, Clayton, Dubilier & Rice Fund XI LP, which closed in February 2021.
The firm had not yet distributed private placement memorandum documents to potential investors or opened a data room, the sources said. PPM documents, which firms distribute when they are officially marketing a new fund, typically provide a summary of the terms of a proposed fund offering, along with other important details, such as a firm’s track record and strategy.
CD&R joins a growing crowd of private-equity firms pitching or planning to pitch a fund seeking $20 billion or more. Others include Thoma Bravo, EQT, Vista Equity Partners and Silver Lake.
While the firm’s previous fund is still too young to generate much in the way of meaningful performance, Clayton, Dubilier & Rice Fund X LP, a $10 billion fund raised in 2017, had produced a nearly 53% net internal rate of return as of Sept. 30, 2021, according to documents from the California Public Employees’ Retirement System, which committed $150 million to the fund.
Last year, in addition to its prior flagship fund, CD&R also raised almost $4 billion in a single-asset secondary transaction that enables it to hold its U.K.-based portfolio company Belron Group AB for longer, WSJ Pro Private Equity reported.
Founded in 1978, New York-based CD&R invests across North America and Europe, focusing on businesses in the healthcare, consumer and retail, industrial and services sectors, according to its website. The firm focuses on acquiring noncore corporate divisions and founder-owned and family enterprises in transition.
Earlier this month, for example, CD&R agreed to acquire publicly-traded building-products manufacturer Cornerstone Building Brands Inc. for $5.8 billion. Last fall, the firm partnered with private-equity peer KKR & Co. to acquire publicly traded enterprise software provider Cloudera in a roughly $5.3 billion deal, and earlier that same year it acquired a majority stake in healthcare provider Vera Whole Health Inc.
Clayton Dubilier & Rice managed $43.44 billion in client assets at the end of 2020, according to a regulatory filing.