Thoma Bravo’s Chip Virnig talks Miami expansion, East Coast recruitment

Thoma Bravo, 2020’s largest private equity fundraiser with more than $70 billion in assets under management, is setting up shop in Miami.

The tech specialist has signed a lease for the top two floors of a 55-story building in the Brickell neighborhood of Miami, which the firm plans to open in late 2022. Located at 830 Brickell, the office will feature floor-to-ceiling windows and amenities such as a yoga room, fitness and wellness center, sundry, on-demand dry cleaning and rooftop restaurant with bay and city views.

Thoma Bravo is not the only big name in finance drawn to the city’s year-round sunshine, not to mention the added benefit of no income tax. Blackstone, Goldman Sachs and Elliott Management have also revealed plans to put feet on the ground in Miami.

As Thoma Bravo ramps up talent recruitment to help manage its soaring growth in assets, Chip Virnig, a partner on the firm’s flagship fund, sat down virtually with PE Hub to share why the firm chose Miami over New York as its East Coast base.

What influenced Thoma Bravo to put down roots in Miami?

If you think about people that want to be innovative and rethink the conventional norm, you have a city right now that’s welcoming and trying to foster that environment. Miami just breaths that. Of course, Austin has been bringing a lot of tech, Denver has been bringing tech in, but kudos to Miami – they are front and center of everything you read, and the mayor has been brilliant.

What’s not to like? It’s incredibly dynamic diverse culture, it’s high energy, it’s beautiful, the weather is great. I think covid is also making people realize life is short and being outside is nice. Quality of life is definitely something that is important for people who want to move. It’s not just because they think they get better office space and access to innovation.

We’re one of the largest investment firms in the world with the bulk of our investment team in San Francisco. I don’t think it was realistic to think we can continue to grow at the rate we need to grow without opening a new location. A lot of people we hired from the East Coast or from New York – now we can give those people an opportunity to be bicoastal. It was natural for us to come up with a bicoastal strategy and covid allowed us to accelerate this. That said, the expansion is not breaking up our coverage model: we are covering the West Coast and East Coast out of [both] Miami and San Francisco.

Why not just open a New York office?

The epicenter of finance has been in New York City forever, and historically, tech investing has been done in Silicon Valley by venture capital. Now, you have large private equity funds and large hedge funds that are getting into  tech growth, as well as all the growth equity funds that are not traditional venture capitalists from Silicon Valley.

I think [the investing landscape] is changing and why not change it with a different location? Miami is totally different: it’s fun, it’s vibrant, and I think it’s going to be a great tool for recruiting the best talent. Covid gave us an opportunity to break the mold and explore more freedom and a new way of approaching our business.

What can we do in New York that we can’t do in Miami? We asked ourselves that question and the answer was, nothing. So why not try something different?

Who will be moving to Miami internally?

We are trying to keep teams intact, so we’ve been methodical about bringing teams to Miami versus individual workers who just want to move.

We have 20 people that will be moving from San Francisco and Chicago to Miami, myself included. We will be bringing at least 10 [out of up to 30] new hires by early next year.

In terms of people, managing partners Scott Crabill, Seth Boro and Holden Spaht will all be staying in San Francisco. Some members of their teams will be relocating to Miami including Tara Gadgil, who co-led the RealPage acquisition, the real estate software provider acquired by Thoma Bravo for $10.2 billion in December last year. Hudson Smith, a partner on Thoma’s Discover Fund, will be co-running the fund and leading his team out of Miami. We are building out a team to co-run Explorer (Thoma’s small-company fund), and our credit team will be hiring people as well.

What new roles do you plan to fill locally?

I’m getting resumes sent to me every few hours, I’m not even joking. I’ve gotten three today, five yesterday – my LinkedIn is blowing up. We’re trying to staff the office in Miami so that we have critical mass across all the Thoma Bravo products as well as future products. We currently have our Flagship fund, our Discover fund, our Explorer Fund and our Credit Fund.

Due to our strong collegial, entrepreneurial culture, we have very little turnover at the firm and look to promote our senior leaders from within. However, as the firm continues to scale, we also expect to have exciting new roles across our investing, operations and support teams in Miami. We are hiring at all levels from the most senior roles to associates.

This interview has been edited minimally for clarity.