How Apax compares with 2017 tech fund giants

Apax Partners has reportedly secured $1bn of commitments for its first tech vehicle, becoming the latest in a growing list of firms eyeing the sector’s attractive returns.

Private equity firms are capitalising on strong investor demand for tech funds.

On Tuesday, Apax Partners became the latest firm to raise a substantial tech-focused fund, securing $1 billion of commitments for its first technology vehicle, according to a report in the Financial Times. Apax declined to comment.

The fund, Apax Digital, will target minority stakes and buyout deals ranging from $30 million to $150 million in high-growth software, internet and tech-enabled services companies globally.

It joins a market already replete with capital. Firms have raised $29.7 billion across 107 funds so far in 2017, according to Private Equity International data. This is compared with $34.9 billion across 129 funds last year, suggesting firms are raising larger sums amid growing interest from limited partners.

Not included in these data is the $93 billion SoftBank Vision Fund, the largest ever raised, which could be considered the posterchild of the current technology fundraising boom. Masayoshi Son, founder of SoftBank Group, has said the fund will back cutting-edge tech companies focused on the internet of things, artificial intelligence and robotics.

Demand for tech exposure has also seen the asset class command higher premiums. Tech investments were on average sold for an enterprise value of 11.14x EBITDA since 2007, according to data from investment decision platform CEPRES. This is compared with a median sale price of just 9.67x EBITDA for non-tech deals.