CD&R set to exceed $20bn target for latest flagship

Clayton, Dubilier & Rice Fund XII, which launched last year, has a hard-cap of $23bn.

Clayton Dubilier & Rice is set to close its latest flagship fund above its $20 billion target, sources familiar with the raise have told Private Equity International – an impressive feat in a harsh fundraising environment.

Clayton, Dubilier & Rice Fund XII has a hard-cap of $23 billion, according to a source who spoke on the condition of anonymity and documents prepared for the Pennsylvania Public School Employees’ Retirement System late last year.

The firm’s performance and reputation helped it to raise such a large vehicle, another source told PEI. The vehicle, which launched last May, held a first close in September on $10 billion and had collected $15 billion as of December, according to PEI data and a report from affiliate title Buyouts.

Fund XII arrived in the market just over a year after its 2021-vintage predecessor closed on nearly $16 billion.

The vehicle will likely close in the early summer, one of the sources said.

Raymond James is understood to be advising on parts of the fundraise.

North America-based companies are anticipated to comprise approximately 70 percent of the fund’s deals, with Europe-based companies making up the remaining 30 percent, according to the PSERS documents.

In terms of sectors, PSERS anticipates Fund XII will commit approximately 30 percent of the fund to industrials, 25 percent to healthcare, 20 percent to technology, 15 percent to consumer and retail and 10 percent to business services. It may also target financial services investments as it builds out a dedicated sector team.

The fund is flexible on ticket sizes, targeting equity checks of between $300 million and $2.5 billion, the documents said.

CD&R and Raymond James declined to comment on the fundraise.

Private equity fundraising fell by more than $100 billion to around $727.6 billion last year, from a record $829.8 billion the prior year, according to PEI data. That figure, however, still exceeds the fundraising totals of 2017, 2018 and 2020.

Many LPs have been forced to slash ticket sizes or decline re-up opportunities due to the denominator effect, which left some institutions bumping up against allocation limits. The higher cost of borrowing and rising inflation has also prompted LPs to reassess the role of private equity in their portfolios.

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