Silver Lake gears up for Fund V launch

  • Silver Lake opens data room for Fund V
  • Described as in pre-pre-marketing phase
  • Target might be more than $10 bln

One of the highly anticipated funds expected to hit the market in 2017 will be tech specialist Silver Lake’s fifth offering. And the firm is starting to talk with limited partners about Fund V, opening a data room on the pool, an LP told Buyouts.

The Fund V target is an “open question,” the LP said. While the target is undeclared, two other sources said the goal will likely exceed $10 billion.

“They’re only pre-pre-marketing now,” the LP said. “Size is an open question. It sounds like they’re not boxing themselves in.”

Silver Lake raised $10.3 billion for its fourth fund, which closed in 2013. Fund IV deployed about $6.5 billion, or 63 percent of committed capital, the LP said. Fund IV was generating a 36.9 percent net internal rate of return and a 1.4x multiple as of March 31, 2016, California Public Employees’ Retirement System  performance data shows.

Fund III, which closed on $9.3 billion in 2007, was producing an 18.2 percent net IRR and a 1.7x multiple as of that date, CalPERS said.

Silver Lake will hit the market in the wake of some large fundraising processes by private equity tech funds. Thoma Bravo closed its 12th tech-focused fund in September on $7.6 billion. Vista Equity has been raising its sixth pool, targeting as much as $10 billion.

This could prove beneficial for the Silicon Valley firm in that some of its major rivals for LP capital will be out of the market or just wrapping up.

On the other hand, a few other large funds are expected back next year. Carlyle Group will likely launch its seventh flagship fund in later 2017, and Apollo Global Management’s ninth pool will be back earlier in the year, looking to raise $18.5 billion.

Action Item: Check out Silver Lake’s Form ADV here:

Jim Davidson, co-founder and chairman of Silver Lake, speaks in a panel discussion, “Private Equity: Where Risk Meets Opportunity,” at the 2009 Milken Institute Global Conference in Beverly Hills, California, on April 28, 2009. Photo courtesy Reuters/Fred Prouser