Dyal Capital invests in Vista Equity Partners

Vista Equity Partners has sold a minority stake to New York's Dyal Capital, according to a statement from the Texas-based private equity firm.  

While financial transaction terms were not disclosed, the investment in Vista Equity Partners is in line with Dyal's approach to acquiring passive stakes of less than 20 percent in alternative asset management firms, a source familiar with the transaction said. 

The deal marks Dyal's second direct investment into a private equity sponsor after it acquired a minority interest in Providence Equity Partners in 2014 for an undisclosed sum. Dyal is part of asset management firm Neuberger Berman. 

Officials from Dyal Capital declined to comment on the size of the Vista Equity transaction, which reportedly values the group at $3.4 billion. 

Vista Equity Partners chairman and chief executive Robert Smith said in a statement that the investment will enable the firm to “continue to take advantage of the growing investment opportunities in the software, data and technology-enabled services sectors.” 

Officials from Vista Equity Partners did not respond to requests for further comment. 

Dyal Capital is stewarded by an investment team comprised of ex-Lehman Brothers bankers Michael Rees, Sean Ward, and Mark O'Sullivan, a trio with experience in investing in established alternative asset managers such as GLG Partners and D.E. Shaw during their time at Lehman Brothers.

According to PEI Research & Analytics, the Dyal Capital Partners III investment vehicle is currently being marketed with a $5 billion target. The Alaska Permanent Fund has committed $550 million to the vehicle. 

It follows the $1.8 billion Dyal Capital Partners II 2014 vintage fund, which obtained a $200 million commitment from the New Jersey Division of Investment and allocation of up to $50 million to make co-investments with Dyal, according to documentation from the state pension fund manager. 

The University of Michigan, Alameda County Employees Retirement Association and The Fire and Police Pension Association of Colorado are additional investors in the Dyal Capital Partners II fund, according to PEI Research & Analytics. 

In 2012, the state of New Jersey's investment manager committed $200 million to the $1.2 billion Dyal Capital Partners I 2012 vintage fund based on the general partners ability to generate a “low to mid-teen annualized return with low volatility and significant upside potential,” according to the state's investment policy committee report in June 2014. 

Vista Equity Partners, a 15-year old firm that oversees $14 billion in committed capital for making investments in software and technology, acquired New York advertising software developer Mediaocean for an undisclosed sum. 

Vista operates from offices in southern Texas, San Francisco and Chicago.