Neuberger, Goldman split Clearlake minority investment down the middle

Landmark Partners, which had a role in the deal, financed an earlier minority investment from Reservoir Capital Partners.

Neuberger Berman’s Dyal Capital Partners and Goldman Sachs’ Petershill programme have made a minority investment in Clearlake Capital Group in which they split the equity cheque 50-50, according to a source familiar with the matter.

The two investors, which are focused on acquiring minority stakes in alternative asset managers, made an undisclosed non-voting investment in the private equity and special situations firm, which specialises in the software and technology, energy and industrials, and food and consumer services sectors.

Secondaries investment firm Landmark Partners, an existing partner in Clearlake, also participated in the transaction, according to a statement.

Goldman Sachs, Dyal and Clearlake declined to comment. Landmark could not be reached for comment.

Clearlake will use the capital to boost its general partner commitments to its funds and back new business initiatives that take advantage of its sector-focused strategy with the “unique integration” of its private equity, special situations and credit strategies, José E. Feliciano and Behdad Eghbali, Clearlake’s founders and managing partners, said in the statement.

Clearlake closed its Clearlake Capital Partners V at $3.6 billion in March, and invested at least $72 million of its own money in the fund, equal to 2 percent of the vehicle, according to pension fund documents from the Pennsylvania Public School Employees’ Retirement System.

The private equity firm also made an investment of up to $20 million in its fourth fund, which closed above its $1 billion target at $1.38 billion in September 2015.

In April 2017, Landmark struck a preferred equity deal in which it financed the purchase of Reservoir Capital Group’s 20 percent stake in Clearlake, according to Private Debt Investor sister publication Secondaries Investor. Landmark Partners funded the deal from its 16th private equity fund, Landmark Private Equity Secondaries Fund XVI, which is currently seeking $4 billion.

Dyal is currently in market with its fourth fund, Dyal Capital Partners IV, for which it hopes to raise $5 billion, according to documents from the Minnesota State Board of Investments. Dyal plans to make a 1 percent GP commitment, the papers showed. As of April the firm had rounded up $4.6 billion, The Wall Street Journal reported.

New York-based Dyal closed Fund III on $5.3 billion. The fund sought to make 10-12 investments in private equity firms. As of the vehicle’s closing in February 2017, the firm had made investments in Vista Equity Partners, EnCap Investments, Silver Lake Technology Management, HIG Capital, Starwood Capital Group and KPS Capital Partners.

Among the announced deals since Fund III wrapped up its fundraising, it has invested in Vector Capital and three credit managers: Cerberus Capital Management’s direct lending arm Cerberus Business Finance, Atalaya Capital and TPG credit arm TPG Sixth Street Partners.

Petershill reportedly closed its second vehicle, the $2.5 billion Petershill II, in February. Its previous investments include a non-voting minority investment of less than 10 percent in Accel-KKR, a firm that invests in buyouts, growth equity and credit.

Minority investments in alternative asset managers have risen in recent years. From the beginning of 2017 through the third quarter of that year 27 deals were struck, according to Pitchbook. Since then, multiple deals have closed, including minority investments in Kohlberg & Company and PAG by Blackstone and Dyal’s investments in Vector and Cerberus.