Wednesday, January 30, 2019

Big Fund: Thoma Bravo Raises $12.6 Billion For Tech Private Equity

I still have trouble with the concept of "tech PE" but from what we've seen they are actually a bit more ah...venturesome (ahem) then their VC cousins.

From PitchBook, Jan. 29:
Thoma Bravo raises $12.6B as PE continues tech investing push
The first US mega-fund of 2019 has arrived. And it's put Thoma Bravo in some elite company, helping the firm to join a select group of private equity giants that have closed buyout funds of $10 billion or more.

The tech-focused Thoma Bravo has wrapped up its 13th flagship fund on a $12.6 billion hard cap, pulling in capital from a variety of investors including sovereign wealth funds, public pension funds and corporations. Dubbed Thoma Bravo Fund XIII, the vehicle easily surpasses a predecessor that raised $7.6 billion in 2016, and Thoma Bravo Fund XI, which closed on $3.65 billion in 2014. The latest announcement comes after the Chicago-based firm collected $2.4 billion in April 2018 for its Discover Fund II.

Thoma Bravo typically employs a buy-and-build investment strategy that's become increasingly common for PE deals in the tech industry. The buyout shop specializes in the tech and software sectors, with a specific focus on application, infrastructure, security software and tech-enabled services businesses. And it won't hesitate to spend big, with investments from the firm's flagship funds ranging from $400 million to $1 billion or more.

It's no shock that Thoma Bravo was able to increase its fundraising by 66% from Fund XII to Fund XIII, considering the private equity industry's growing appetite for US tech companies. Private equity investments in the US IT sector have increased annually every year dating back to 2010, according to the PitchBook Platform. And in 2018, those transactions made up a larger proportion of US PE deals than at any point since at least 2010, per our 2018 Annual US PE Breakdown.  ...