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Vista Equity closes Fund VI on $11 bln

  • Vista’s new fund almost double the size of Fund V
  • LA City Employees, NJ among LPs to commit
  • Includes $500 mln from the general partner

Vista Equity Partners closed its latest flagship fund on $11 billion, including $500 million from the firm itself, according to a source with knowledge of the firm.

Vista Equity Partners Fund VI is Vista’s largest fund to date and a little less than double the size of its $5.8 billion 2014 vintage fund. The firm earlier this year increased its hard cap to $10.5 billion from $10 billion. The Wall Street Journal first reported on the final close Monday morning.

Vista VI was widely considered among the most sought-after funds of the past year, several LPs told Buyouts during the fundraise. Fund VI attracted commitments from a range of investors, including Los Angeles City Employees’ Retirement System, New Jersey Division of Investment and Oregon Public Employees Retirement Fund.

The firm’s previous funds have performed consistently well, according to LP due-diligence materials reviewed by Buyouts. Its $3.5 billion 2012 vintage fund was netting a 22.1 percent internal rate of return and 1.76x multiple as of Sept. 30, Oregon Investment Council documents show. Fund V has yet to generate meaningful returns.

Vista Fund VI will pursue investments in enterprise software. The firm will target companies with enterprise values of $400 million to $5 billion and will typically invest at least $200 million of equity per deal, an Oregon investment memo says.

Led by founder Robert Smith, Vista sold a stake in its own management company to Dyal Capital Partners in 2015 for $875 million, according to a due-diligence memo obtained by Buyouts. The stake was widely reported as 20 percent of the firm.

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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