Exclusive: Vista raises $3.8 bln for first close on flagship Fund V

The hits just keep coming for Vista Equity Partners.

Earlier this month, Vista’s founder and chief executive, Robert Smith, was featured in a lengthy profile in the New York Times’ Dealbook. The article was arguably the first time Smith and Vista got mainstream recognition, despite several years of industry-beating investment performance.

Now comes word that Vista Equity has held a first close for its fifth flagship fund on about $3.8 billion, already beating its $3.5 billion target and heading for its hard cap of $5.75 billion, according to two people with knowledge of the fundraising.

Vista Equity declined to comment.

The firm, led by former Goldman Sachs tech banker Smith, launched Fund V in late January and has already amassed around $11.5 billion of demand, one of the people said. Fund V will likely hold a final close this year.

Vista has been enjoying a strong run of fundraising in recent years based on the solid performance of its past funds. Fund III, which raised $1.3 billion in 2008, was generating a 2.7x investment multiple and a 32.38 percent net internal rate of return as of Sept. 30, 2013, according to performance information from the New Jersey Division of Investment.

Vista raised its fourth flagship fund in 2012, collecting $3.5 billion and beating its $2.5 billion target. That fund, while still in the early part of its life, was producing a 1.05x multiple and a 4.67 percent net IRR as of Sept. 30, 2013, according to New Jersey information.

Along with its flagship vehicles, Vista also has a series of mid-cap investment vehicles called Foundation Funds. Vista closed its second Foundation Fund late last year on $1.1 billion. Vista also is raising its debut debt vehicle, targeting $600 million. The debt fund held a first close in October on about $120 million, according to a limited partner in the fund.

Vista focuses on investments in enterprise software. In March, the firm acquired PeopleAdmin, which provides on-demand talent management technology for higher education and government.

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