Thoma Bravo Wrapping Up Fundraising

Thoma Bravo is nearing the final stages of raising its first fund since the departure of partner Bryan Cressey. The firm — formerly known as Thoma Cressey Bravo (and before that, Golder Thoma) — split with Cressey last year, when he decided to launch a firm devoted exclusively to the healthcare sector.

The new fund, managing director Carl Thoma’s ninth, had an initial target of $1.5 billion. That’s a huge jump from its previous vehicle, which had $765 million in commitments. It’s even more surprising considering that one of the firm’s key dealmakers, Cressey, would not be around to help deploy all that money. LPs expressed those concerns, and the firm relented, lowering its target to $800 million. It held a first close on $500 million in April.

Thoma Bravo has closed on 95% of that fund and is wrapping up its final commitments, a source told peHUB. The firm won’t announce a formal close until the beginning of 2009.

The source said around 80% of the commitments to this fund came from LPs of  Thoma Cressey Bravo. Only one or two of the firm’s 10 key investors expressed concern over the Cressey’s split. It’s a relatively clean break since Cressey is literally taking the Thoma Cressey Bravo healthcare team and splitting it off. In other words, it’s not as if Thoma Bravo and Cressey & Co. will be competing for deals. And according to our source, the firms weren’t in competition for LP commitments, either. Besides, even if the two new firms are raising, investing and managing separate investment vehicles, they still must co-manage Thoma Cressey Bravo’s previous three funds.

The funny thing is, they continue to share an office space! Even though the split looks pretty amicable to me, it still reminds me of a friendly divorce-would the couple really continue to live together? Are there jealousy issues when one firm starts seeing other LPs?

Thoma Cressey Bravo’s two most recent funds, Thoma Cressey Bravo VII LP and Thoma Cressey Bravo VIII LP have performed relatively well, with fund seven posting a return in the high 30% range. Fund eight is too early to tell. Fund six, on the other hand, has had a rough go of it, thanks to exposure to companies serving the telecom space. Those businesses watched their customers crumble under the 2001 tech and telecom meltdown. Fund six will likely break even, with returns ranging from 2% to 6%.

The most unfortunate thing about the Thoma Cressey Bravo split is that the firm’s initials are no longer TCB, which, as you, me, and Elvis know, means Taking Care of Business. Guess the guys in Chicago won’t be able to hand out LP appreciation TCB Necklaces anymore.