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CD&R to close oversubscribed Fund IX on hard-cap

The firm has enough investor demand to raise $8bn but will cap the fund at $6bn, not including a $250m GP commitment. 

Clayton Dubilier & Rice will hold a final close for its Fund IX on its $6bn hard-cap within the next month, according to a source familiar with the matter.

CD&R declined to comment.

The firm has held a third close on about $5.7 billion, the source said, but has attracted about $8 billion of interest from limited partners. After processing the final investors’ documentation, CD&R will cap the fund at its $6 billion hard-cap. An additional $250 million general partner commitment will take the fund’s total to $6.25 billion.

Fund IX launched in March 2013 and held an initial close on $3 billion in August, Private Equity International previously reported.

CD&R has made three investments from Fund IX, including specialty chemicals supplier Ashland Water Technologies, which the firm acquired for $1.8 billion last week. The transaction is expected to close in September 2014, upon which CD&R operating advisor Lewis Hay will become chairman of the company. Other Fund IX investments include sterile drug compounding service provider PharMEDium Healthcare Corporation. CD&R also created a new company from acquiring Harsco Corporation’s infrastructure business and Brand Energy & Infrastructure Services in November 2013.

CD&R’s prior fund, Fund VIII, closed on $5 billion in 2009 and was generating a net internal rate of return of more than 20 percent and a return multiple of 1.7x as of 30 June 2013, Bloomberg reported. Fund VIII received commitments from limited partners such as Los Angeles-based J. Paul Getty Trust and the Amherst College endowment, according to PEI data.

CD&R was active on the investment front in 2013, acquiring four companies including UK discount retailer B&M Retail and John Deere Landscapes, according to its website. During the past five years, CD&R has invested more than $6 billion in 16 companies.

New York-based CD&R has managed more than $19 billion in 59 investments since it was founded in 1978.