How Clearlake Capital’s José E. Feliciano is finding value across private markets

Welcome to Goldman Sachs Exchanges. You might notice that today's episode is coming to you on Monday rather than our regular Tuesday. That's because after the US election, we're going to give you a special episode looking at the market reaction to whatever the news may be. Today, you'll hear a great interview with Jose Feliciano, cofounder and managing partner of investment firm, Clear Lake Capital, conducted by my Goldman Sachs colleague, Michael Brandmeier. We hope you enjoy. Welcome

back to Goldman Sachs Exchanges Great Investors. I'm Michael Brandmeier, global head and chief investment officer of the external investing group within Goldman Sachs Asset Management. Today, I'm very excited to be sitting down with Jose Feliciano, managing partner of Clear Lake Capital Group. Jose cofounded Clear Lake in 2,006 and has helped grow it into one of the world's largest private equity firms with $80,000,000,000 in assets under management today. How has Jose been able to drive such incredible growth, and what does the future look like for Clear Lake Capital and for the private equit

First of all, you know, thank you. Thank you for having me back. Very exciting to be back at Goldman Sachs. This is definitely one of those times in the world where the outlook appears to be extremely uncertain even to investors, even to private equity firms like us. When you look at the crystal ball, you see many contradicting factors out there. You certainly see at the very macro geopolitical, you see lots of issues. You know, we have a war in Europe, we have a significant conflict in the Middle East, we have significant tension in Asia, here in the US, we have an election. So these are all

a lot of your brethren out there are complaining, saying, gosh, the markets aren't really open. It's hard to get a lot done. If you just look at the industry data, transaction flows are still quite light overall, but you have a very different toolkit at Clear Lake that you can access things through different parts of the capital structure. So how do you think the opportunity set as you sit here today looks different? Yeah.

That's a great question. I'll give you an example. I'll go back to 2020 when at the beginning of the pandemic and essentially, almost overnight in the course of 2 or 3 weeks, right, the capital markets essentially shut down. We saw extreme volatility in the capital markets overall and obviously a real effect in the real economy. Those are moments in time where the traditional private equity firms are not able to access the market. There's not much to do when the capital markets shut down. During that summer and, you know, kind of beginning of the fall, you know, Clear Lake invested probably 3

restructurings. Jose, investors have been hurting for more liquidity. In private equity parlance, we call this DPI. So this is cash coming back to investors who have invested in private equity firms. If I look at how much money in the last few years you've returned to LPs, it's a lot, and you've continued to be quite creative in getting money back to LPs. Talk about your thinking and your strategy there.

Yeah. It's a great question. And over the past 2, 3 years, we have returned upwards of $15,000,000,000 of capital to LPs. We have always believed that our job at the core is very simple. We take our investors' money, a lot of our own money as well, and we invest it. And the quicker we can get it back to our investors with the higher multiple attached to it, meaning multiply that capital, the better it is. And I think one of the significant things as part of our ethos is th