Vista taps executive on Foundation team to lead micro-cap strategy

Vista Equity Partners appointed Principal René Yang to run the firm’s new micro-cap strategy, which is expected to launch early next year, according to two people with knowledge of the firm.

Yang will work on the micro-cap fund with an operator who has been a senior executive on Vista portfolio companies, the two people said. It’s not clear who the operator is.

LPs are lining up to access the micro-cap fund, which is expected to hold a quick fundraising once it launches, probably early next year, sources said. In prior interviews LPs had speculated that Vista might hire from outside to lead the strategy.

The fund is expected to target $400 million with a $500 million hard cap, the people said.

Yang, who joined Vista in 2007, has worked on the firm’s middle-market-focused family of Foundation Funds.

Prior to Vista, Yang focused on M&A within Yahoo’s corporate-finance group, and she worked in the global technology group at Lehman Brothers, her bio on Vista’s website says.

The micro-cap strategy will succeed the Foundation Fund series, which started small but outgrew the smallest side of the market, a source previously told Buyouts.

Which size companies the micro-cap fund will target is unclear. Vista’s third Foundation Fund, which is in market targeting $2 billion with a $2.5 billion cap, focuses on companies with enterprise values of as much as $400 million, New Jersey Division of Investment documents say.

Fund II, a 2013 vintage, pursued companies with enterprise values of as much as $200 million.

Vista’s first Foundation fund closed on $400 million in 2010. The strategy grew quickly, with Fund II closing on $1.1 billion in 2013.

The Foundation series is a strong performer. Since 2009, the firm has invested $900 million in 15 small-cap deals, which have generated a gross internal rate of return of 51 percent and a multiple of 2.3x as of Sept. 30, 2015, Arkansas Teachers’ Retirement System documents show.

Fund II was producing a 1.05 total value multiple as of April 30, 2016, New Jersey investment unit documents show.

Vista is also in the market with its sixth flagship fund targeting $10 billion.

Update: This article has been updated to include Rene Yang’s new title of principal, to which she was recently promoted.

Correction: This article incorrectly used the wrong gender pronoun. The article has been updated with the correct information.

Action Item: Reach Vista CEO Robert Smith’s assistant, Maria Nicolas, at +1 512-730-2480.

Robert Smith, founder, chairman and CEO of Vista Equity Partners, speaks at the Milken Institute Global Conference in Beverly Hills, California, on May 2, 2016. Photo courtesy Reuters/Lucy Nicholson