Assertion Supported
Chelsea FC's forced auction excluded a significant portion of natural buyers
“The economic sanctions that the UK and the European India put off certain individuals directly led to one of those individuals, former owner Chelsea, having to put the team up for sale. So, situationally, for us, Chelsea was essentially a forced auction by a f…”
Opinion
Feliciano: Many PE investors lack experience working at real operating companies
“Many people in our industry and investing side I've never really had a real job. Never worked at a job where they're selling widgets, making, producing, marketing widgets. I think that that gives you a very different perspective about investing.”
Insight
Feliciano: 200-page investment decks indicate deal team laziness, not rigor
“So a long, you know, PowerPoint presentation is just, you didn't have time to really digest kind of the information for the consumption of the committee.
You got lazy and just put out every PowerPoint or every slide that you could.
That's not the way I like to…”
Insight
Feliciano: Operational changes are easier to implement in larger companies
“What we have found is that the type of change that we bring to the table is actually easier to implement now than it was five or 10 years ago with a smaller company. Not necessarily because these companies are embracing it any more or any less, but they have j…”
Disclosure
Clearlake won the Chelsea FC auction on speed, not highest price
“Here, price was not the most important factor, speed, certainty, Understanding of a situation. Understanding how to turn a business around, perhaps. Those are actually more important considerations. And that enables us to prevail.”
Insight
Feliciano: Special situations and private equity run on inverse economic cycles
“Over my time of time, one of the things that I noticed is that because we were more over special situations, there were times in the cycle that we were very missing. There were some really interesting opportunities, but there were other times in the economic c…”
Assertion Not publicly verifiable
Feliciano: Clearlake invested $3B to $4B in credit over 3 months in 2020
“When COVID created significant dislocation, not only in our lives, but in the credit markets, we invested three or four billion dollars in the secondary credit markets, basically the period of three months.”
Disclosure
Feliciano: Clearlake struggles hiring lateral partners from hedge funds and growth equity
“We actually have a difficult time going to a hedge fund or hiring somebody that doesn't stress very well laterally as a partner. We equally have a challenge. We go to a growth equity firm, somebody that understands to say, you know, healthcare is really well, …”
Insight
Feliciano: Warren Buffett's success stems from a highly flexible capital structure
“One of the key things about Warren Buffett success is that he had a very flexible capital structure, very flexible source of capital, and within that The same team, if you think about it, was making buyout decisions, was buying equity in the secondary market, …”
Disclosure
Clearlake refused LP demands to cap strategy flexibility during fundraising
“We were certainly asked by some of our potential LPs, well, we would invest if you restrict this part of your strategy to no more than 40% of the investments or no more than x. And we refused to do that. Even at a time we were desperate for capital because we …”
Insight
Feliciano: Executing two to four critical business changes drives PE returns
“The better we are, and identifying the two or three or four things that really matter in that business, And then making that change in those two or three or four things, we have found that the better the outcome. And then everything else is secondary.”
Insight
Clearlake's investment committee brutally challenges overly optimistic deal presentations
“So if you come to a investment committee at Clearlink with a fancy deck and it's all offside and the objections go up into the right and it
Everything's great.
You're probably going to come out a little bloody from that investment committee, because there are …”
Disclosure
Clearlake generated a 10x return on Sage Automotive Interiors
“And then we actually sold it to a customer, actually customer slash supplier, and ended up making 10 times our money, and certainly a great outcome.”
Assertion Not checkable as stated
Feliciano: Some LPs still dislike minority GP stake investors
“To this day, there are LP segments of the LP world that don't love that idea, right? Don't love the idea. They look at it and they think, well, we think that that may misalign incentives some ways, and there's still some elements of the LP base out there that …”
Assertion Partly supported
Clearlake raised nearly $10 billion across five single-asset continuation vehicles
“Total capital, roughly just showing up ten billion dollars in those five vehicles. And the first two have already returned all the capital back to the new investors.”
Opinion
Very little deal activity is happening in traditional private equity buyouts
“Today, that probably means there's very little going on in the traditional buyout world, primarily because of the lack of financing that really puts it down on our fence, and people are not bringing businesses and traditional private equity options, because wh…”
Insight
Feliciano: Major sports teams operate like recurring-revenue media businesses
“A lot of the revenue in a traditional major sports league team is actually recurring revenue. That's locked in. A lot of that revenue is media related, so a lot of these properties, if we don't think about them as such, they're really valuable, renewable conte…”
Opinion
Feliciano: Permanent capital is the most interesting structural trend in private markets
“The most interesting trend out there that we have to think about is the different versions of permanent capital, and that can be in a waterfront. There's a version of permanent capital that could be partnering or doing something with an insurance company that …”
Insight
Clearlake requires deal models to show returns without assuming unidentified M&A
“If you were an investment committee, clearly you would know that you showed me an upside case that includes a bunch of acquisitions that we haven't done that have not been identified. You're going to be called out for it. It's okay to have a buy and build stra…”
Disclosure
Clearlake embeds associates in portfolio companies for up to six months
“So to this day, one of the things that we do at Clearlake is that our associates during their time here, they actually spend anywhere between three months, sometimes as much as six months embedded within one of our portfolio.”
Disclosure
Feliciano: Clearlake structures funds with full capital recycling during investment periods
“You look at our funds, additional funds with a ten-year block-up, maybe a few extensions. The investment period is five or six years, but during that investment period, we can recycle any of the capital.”
Disclosure
Clearlake pivoted entirely to the secondary market in March 2020
“When we went from the first week of March where we were having investment committees weekly and talking about buyouts, two weeks later, there were no buyouts in our pipeline. We were having investment committee daily and everything that we were looking at was …”
Assertion Supported
Feliciano: Clearlake completes 10 platforms and 40 to 50 add-ons annually
“In a typical year, we'll do 10 platforms, not 10 investment platforms, but we'll do probably 40 to 50 ads.”
Disclosure
Clearlake launched with seed capital from Reservoir Capital
“In our case, we partnered with a firm that's fairly well-known in the seeding world or was a reservoir capital led by Dan Stern and Craig Huff. They provided some of that initial capital.”
