US private equity firm Clayton, Dubilier & Rice has raised approximately $4 billion (€2.8 billion) for its latest buyout fund, expected to close on $7.5 billion near the end of the year.
The New York-based firm, known for its high-profile stable of operating partners including former General Electric chief executive Jack Welch, began sending out private placement memorandums for its eight buyout fund late last year before embarking on a road show in January, according to a source familiar with the fund.
Although existing investors accounted for a significant majority of the raised capital, CD&R developed new relationships with several limited partners, including the South Carolina Retirement Systems (SCRS) and the Teacher Retirement System of Texas, a source confirmed to PEO.
SCRS committed $100 million to the fund, according to investment committee documents from the $29 billion pension. The source also indicated that the firm’s fundraising pace was significantly quicker than that of its seventh buyout fund, which closed on $4 billion in 2005.
CD&R’s fundraising clip comes at a time when investor appetite for buyout funds has shown some signs of abating, especially for those funds raised by firms that flourished during the so-called buyout boom.
The fundraising also comes in the face of a recent bout of negative publicity surrounding the declining stock price of rental car company Hertz. CD&R partnered with The Carlyle Group and Merrill Lynch Global Private Equity in the $15 billion acquisition of Hertz from Ford Motor Company in 2005, taking the company public the following year.
At time of press, Hertz stock was trading at $9.56 per share, down 36 percent from the initial public offering price on investor fears of how a possible decline in consumer spending and an increase in gas prices would affect the company.
However, a source familiar with Hertz's performance said that the company's EBITDA was up 35 percent since the acquisition.