After 19 years in business, Clearview Capital’s investment strategy has not changed much. Its record has argued for staying the course.
The Stamford-based private equity firm is riding the momentum of two recent deals for companies that each sold for several times the price for which Clearview bought them. Such results are nothing new for the group. Clearview officials credit their series of strong performances on a steady strategy that values the growth of small but promising businesses.
“We’re acquiring exactly the same kind of businesses we did when we started 19 years ago,” co-founder and managing partner James Andersen said in an interview this month at the firm’s downtown offices. “We’ve stayed very consistent in our focus.”
The two firms sold last December typify Clearview’s track record. The firm acquired its majority stake in GCR, a New Orleans-based software development and consulting firm focused on the public sector, for $27.5 million in 2011. The firm bought its majority position in Xact Data Discovery, a Mission, Kan.-based provider of IT services for the legal sector, for $24 million in 2015.
Clearview declined to disclose specific sales totals for GCR and Xact, but said those numbers represented several times the worth of their investments.
The firm more than tripled the annual earnings of GCR and more than quadrupled the earnings of Xact, according to data from the firm. Acquisitions made by both companies under Clearview’s ownership contributed to their growth.
For the past 10 companies sold by Clearview, average annual earnings have more than tripled under its management.
“It’s fun to build these smaller businesses — it’s like raising a teenager to an adult,” Andersen said. “We really enjoy that. … We have very strong relationships with our former portfolio companies.”
To date, Clearview has invested in 27 companies, which have been concentrated in business services, health care, manufacturing and specialized distribution. In total, those firms have made 65 “add-on” acquisitions,
Today, Clearview has a portfolio of eight companies.
“The common theme is the stage of life of the company,” Andersen said. “They’re almost always founder- or family-owned. We are typically the first institutional capital to come into these businesses. They’ve gotten to a point where if they want to continue to grow they need help.”
Among recent measures, alternative-assets data and intelligence firm Preqin ranked Clearview in 2016 in the top group of consistently high-performing buyout firms.
Investors include funds of funds, university endowments and public pension funds. Dartmouth College’s endowment started investing with Clearview about five years ago. Dartmouth officials declined to specify how much the endowment has under Clearview’s management, but they said Clearview is a “core” partner.
“Jim (Andersen) sets the tone for them, and it’s just a fantastic team that is super talented,” said Mike Sullivan, the Dartmouth endowment’s managing director in charge of private equity and venture capital programs. “Their performance is right at the top of the group. They’ve been consistent year after year and investment after investment. That consistency is what makes them stand out.”
Clearview launched in 1999 in a room above a garage by Binney Park in the Old Greenwich section of Greenwich. Later, it relocated to offices in downtown Greenwich and then back to Old Greenwich. It moved in July 2016 to its current home, where it takes about 6,000 square feet on the 11th floor of the office complex at 1010 Washington Blvd, overlooking Mill River Park.
The firm now employs 20. Many live in the area, including Andersen, a Wilton resident.
“It’s great to be on the park,” Andersen said. “We have three guys who live in New York and the commute for them to Old Greenwich was difficult. ... From here, they love it because they can walk back and forth to the express (train) stop.”
The company plans to raise another fund this year. It would be larger than the current $325 million fund, but not “spectacularly bigger,” Andersen said.
“We’ve got a great team of people,” Andersen said. “We really like what we do. We enjoy it.”
Sourced from Stamford Advocate