Clayton Dubilier Said to Raise $3 Billion for Buyout Fund

Clayton Dubilier & Rice LLC, one of the industry’s oldest private-equity firms, has gathered almost $3 billion in the first phase of fundraising for its ninth investment pool, according to a person familiar with the matter.

The amount collected so far includes a $250 million commitment from New York-based Clayton Dubilier, said the person, who asked not to be identified because the fundraising is private. Clayton Dubilier & Rice Fund IX LP started raising money in March with a target of $5 billion.

Clayton Dubilier, which specializes in buying unwanted or underperforming divisions of larger corporations, is vying for capital in a competitive fundraising market. About 1,958 private-equity funds are seeking a total of $770 billion, according to London-based research provider Preqin Ltd.

Tom Franco, a spokesman for Clayton Dubilier, declined to comment on the fundraising.

Clayton Dubilier generally invests in distribution or services-related businesses with enterprise values of $1 billion to $15 billion, according to the firm’s website. The firm is staffed with a team of operating partners who typically work as chairman of the board at each of the companies that the private-equity firm invests in.

Prior Fund

The firm’s new fund would be the same size as the prior vehicle that was closed in December 2009. That fund, Clayton Dubilier & Rice Fund VIII LP, raised less than the $7.5 billion it originally sought amid the financial crisis, while surpassing the size of the firm’s 2006 pool by 25 percent. The predecessor fund is 80 percent invested and was generating a more than 20 percent net internal rate of return with a 1.7 times multiple of invested capital as of June 30, according to the person.

Portfolio company HD Supply Holdings Inc. went public in June. This month, Clayton Dubilier took Envision Healthcare Holdings Inc. public.

Clayton Dubilier’s chairman and co-founder Joseph Rice III, 80, who helped start the firm in 1978, retired last year. The firm is led by Donald Gogel, who has worked at Clayton Dubilier for 23 years.