I noticed yesterday it was still light outside after 6 p.m., and this morning at 6 a.m., the sky is already nice and bright. Getting closer to spring … and out of this … ‘winter’ or whatever you call it these days.
It’s a fundraising arms race, baby!
This week we’ve had a bunch of disclosure about new, large funds in or coming to market, including Silver Lake and Thoma Bravo, both which focus on investments in the tech realm. The firms differ in that Thoma targets software, while Silver Lake has a broader tech mandate. But it’s still dollars flowing into the tech space.
I’ve heard from LPs that they likely wouldn’t commit to both funds at the same time; rather, they’ll pick one or the other. This is the same sort of dynamic that occurs when Thoma is in the market at the same time as Vista Equity. Which sets up these fundraising processes as quite competitive.
Silver Lake could raise as much as $18 billion to $20 billion, sources told me. Thoma is targeting $14 billion for its fourteenth fund, after just closing its 13th fund last year on $12.6 billion. Silver Lake’s Fund VI isn’t officially out yet; it’s expected to hit the market in the second quarter. Thoma, meanwhile, is officially out with its 14th fund, according to Form D fundraising documents.
The firm is moving forward with its new fundraising with a new leadership structure. The firm at the end of last year named Managing Partners Egon Durban and Greg Mondre as co-CEOs. Read about Silver Lake’s flagship fund here.
Thoma is not only raising its flagship, it’s out with its middle-market fund called Discover, targeting $3 billion, and its debut small-cap fund called Explore, targeting $1 billion, which Buyouts exclusively reported in January. Check out the new story on Buyouts here.
Tech-specific funds that closed last year raised $61 billion, according to fundraising data from Private Equity International. This year so far, such funds that have closed raised $10 billion, including buyouts, venture and growth equity funds, PEI found.
Bloomberg reported this week that Dyal Capital is coming back with its fifth fund that wants to raise at least $9 billion (!!). The firm closed Fund IV on $9 billion in October, the firm said. Dyal boosted the target for Fund IV by $3.5 billion during the fundraising period.
At close, Fund IV had already made 10 investment and deployed about 64 percent of fund capital, Dyal said at the time. So coming back to market now isn’t that surprising.
What surprises me is the size of the fund. Hard to believe the market contains this much opportunity to invest in GP management companies. The word often is that the best opportunities (meaning the best firms) have already been tapped, and so managers looking for GP stakes opportunities have to come down market to find strong investments.
What do you think about this burgeoning strategy? What have you seen in the market in terms of opportunity? Hit me up at firstname.lastname@example.org
Blackstone Group invested in Dealpath, which provides software for real estate investment and portfolio management. Its a cloud-based deal management platform and has surpassed $5 trillion in transactions. Dealpath is backed by other investors including JLL Spark, 8VC, GreenSoil Investments, Goldcrest Capital, LeFrak, Milstein and Bechtel. Read the news brief here on PE Hub.
Birch Hill Equity Partners collected more than C$1.7 billion ($1.3 billion) for its sixth mid-market fund, writes Kirk Falconer on Buyouts. Check it out here.
Have a great weekend! Reach me with tips n’ feedback, gossip, Drama or whatever at email@example.com, on Twitter or find me on LinkedIn.