Technology-focused Thoma Bravo raised more than $32bn for buyouts and growth investments, including a record haul for its main buyout fund, against a challenging fundraising backdrop this year.
The Chicago-based private equity firm collected $24.3bn for its flagship buyout vehicle, Thoma Bravo Fund XV, easily topping the $17.8bn it collected for a predecessor pool. The latest amount sets a record for a tech-focused buyout fund raised by an independent private equity firm, according to data from Preqin.
The fundraising concluded during a period in which many firms have struggled to amass new capital and during a year in which many publicly traded tech company stocks plunged in value.
Private-equity fundraising in the first half of this year fell 43% from the same period last year, according to Preqin. The tech-heavy Nasdaq Composite Index fell as much as 35.5% this year and remains down by nearly 30% since the end of last year.
“Enterprise software is a very resilient sector, particularly in times of economic pressure,” said managing director Jennifer James, the firm’s chief operating officer and head of investor relations and marketing. “It’s incredibly resilient. We’ve proven that through multiple cycles of investment.”
The firm raised commitments for the new funds over roughly 10 months despite challenges presented by economic and geopolitical turmoil, with both virtual and in-person meetings with investors, James said.
“Spending time in-person with your investors is very important, and we always prioritise that,” James said. The campaign was aided by the firm’s decades of successful investing in enterprise software businesses, she said.
Thoma Bravo’s Fund XV easily surpassed the previous record holder, the $20bn Silver Lake VI vehicle raised about two years ago by rival buyout shop Silver Lake, Preqin data show. Menlo Park, California-based Silver Lake is in the market to raise capital for a seventh main fund.
Additionally, Thoma Bravo said it collected $6.2bn for its Thoma Bravo Discover Fund IV, which it uses to back midsize software and technology businesses. The firm also banked $1.8bn for its Thoma Bravo Explore Fund II, which is focused on backing smaller businesses.
All three new funds closed above their targets, and more than 85% of the capital commitments came from investors in previous Thoma Bravo funds, James said. Commitments to the 15th main fund came from investors such as the New York State Common Retirement Fund, the Virginia Retirement System and the State of Wisconsin Investment Board, with investments of $400m, $100m and $115m, respectively, the WSJ Pro Private Equity LP Commitments Database shows.
Thoma Bravo intends to use the money for investments in sectors such as healthcare, security, infrastructure and finance. James said the firm has already closed deals involving two of the three funds.
The firm had assets of about $120bn at the end of September, a figure that includes some of the money raised in the three new funds, she said.
The firm recently expanded its overseas operations, opening a London office as a hub for European deals and hiring Irina Hemmers as a partner to lead the new branch. Hemmers joined from London-based Inflexion Private Equity Partners where she led the technology investment team.
“We have had a nice track record in Europe,” James said, adding: “It continues to be an exciting area of technology development and a great hunting ground for new deals.”
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