Clearlake Capital Expands Credit Platform with $5B+ Acquisition

Clearlake Capital Group has significantly expanded its credit platform, Clearlake Credit, by integrating a substantial portfolio of collateralized loan obligations (CLOs). This strategic move, which saw Clearlake Credit assume management of 31 CLOs, injects over $5 billion in assets under management (AUM), propelling the platform's total AUM to approximately $39 billion. The acquisition marks a pivotal moment for Clearlake, reinforcing its ambition to be a comprehensive provider across diverse credit strategies, from liquid markets to private debt solutions.

The integration of these established CLO mandates represents a calculated acceleration of Clearlake Credit's growth trajectory in the liquid credit space. Rather than building this segment from the ground up through incremental client wins, the firm has opted for a more direct route to scale. This approach is particularly relevant in today's market, where institutional investors increasingly favor asset managers capable of offering integrated solutions across a broad spectrum of credit investments, consolidating their relationships with fewer, more capable partners.

This transaction not only enhances Clearlake Credit's operational capacity but also deepens its relationships with a sophisticated investor base. The addition of 31 CLOs diversifies the platform's product offerings and demonstrates its ability to absorb and effectively manage complex, large-scale credit vehicles. This capability is crucial for attracting and retaining institutional capital, which demands both performance and breadth of strategy from its fund managers.

Founded in 2006, Clearlake Capital Group has evolved into a formidable alternative investment firm, now overseeing more than $185 billion in AUM across private equity, credit, infrastructure, secondaries, and co-investment strategies. While its private equity business has garnered significant attention, the firm has been methodically building out its credit operations, recognizing the synergistic potential and growing investor demand for diversified credit exposure. This latest deal underscores that strategic commitment.

The CLO market, a significant component of the broader structured credit universe, has seen robust activity. As of early 2024, the U.S. CLO market alone managed well over $800 billion in assets, reflecting its importance in providing financing for leveraged companies and offering diversified credit exposure to investors. By acquiring a substantial book of CLOs, Clearlake Credit positions itself to capture a larger share of this market and leverage its expertise in managing these complex instruments.

While the financial specifics of the transaction were not disclosed, the strategic implications are clear. Clearlake, through its Clearlake Credit platform, has made a significant move to solidify its position as a major player in the credit markets. The firm was reportedly advised by Milbank and Dechert, while GreensLedge Capital Markets represented the seller, LCM Asset Management.