Dyal buys minority stake in Silver Lake

Dyal Capital Partners, the private equity unit of New York-based investment manager Neuberger Berman, has acquired a minority stake in Silver Lake, according to the Menlo Park-based firm.

Dyal took a passive non-voting interest of less than 10 percent in Silver Lake, which specialises in the technology industry. Terms of the transaction were undisclosed.

Acquiring minority equity stakes in alternative asset managers has been Dyal’s business since its creation in 2011. The firm now has more than $6 billion devoted to permanent-capital investing, which unlike traditional private equity investing, does not require the funds it invests in to cash out of assets purchased and distribute returns to shareholders within a set five-to-seven year period. Dyal’s previous transactions include stakes in Vista Equity Partners, Capstone and Providence Equity.

Dyal, which has offices in New York and London, is run by managing directors and senior principals Michael Rees, Sean Ward, and Mark O’Sullivan, and is currently raising Dyal Capital Partners III, which has already received commitments from New York State Common Retirement Fund and the State of New Jersey.

Silver Lake, which has $24 billion in assets under management, will use the proceeds from the transaction for growth initiatives, and to extend its global investing capabilities, the firm said in a statement.

Dyal isn’t the only asset manager acquiring minority stakes in other private equity funds: Goldman Sachs Asset Management, Credit Suisse, and Hycroft have also set up similar businesses. Revenue comes from sharing management fees, returns from GP commitments, and carry profits from portfolio firms.

The firms declined to comment beyond the statement.

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