Silver Lake amasses $20bn for largest-ever tech-focused PE fund

The haul for Fund VI comes as firms raised more than $500bn of capital in final closes last year.

Silver Lake has wrapped up fundraising for its sixth flagship fund, amassing approximately $20 billion against a target of $18 billion, making it the largest tech-focused private equity fund raised to date.

The firm began raising capital for Silver Lake VI in January last year, before the global pandemic wreaked havoc on markets and battered economies.

Fund VI closed on its hard-cap and received a $500 million GP commitment from the firm, according to a statement.

The firm raised $5 billion more for the vehicle than its 2016-vintage $15 billion predecessor.

Silver Lake’s haul comes as private equity firms held more than $500 billion in final closes last year, according to preliminary full-year figures from PEI data. Fundraising during the pandemic has been marked by re-ups and the the flight to familiarity. Though last year represented the third-highest private equity fundraising total since 2015, the number of funds closed dipped to its lowest level over that period at 902.

With its latest vehicle, Silver Lake “significantly increased capacity in its flagship strategy to make large-scale growth investments in a wide range of opportunities driven by the broad impact of technology across the global economy”, the firm said in the statement.

“Silver Lake is firing on all cylinders as we continue to execute our strategy of helping to build and grow great companies at a time of accelerating digital transformation across the globe,” said co-chief executives Egon Durban and Greg Mondre.

The California Public Employees’ Retirement System invested $800 million in Fund VI, while Los Angeles County Employees’ Retirement Association, Florida Retirement System Trust Fund and Cathay Life Insurance invested $200 million, $175 million and $100 million respectively, according to PEI data.

Investors in Fund VI include public and corporate pension funds, sovereign wealth funds, insurance companies, endowments, foundations, funds of funds, family offices, technology industry leaders and individual investors across North America, South America, Europe, Asia and the Middle East, according to the statement.

Silver Lake VI will follow the same strategy as its predecessor vehicles, investing flexibly across a broad spectrum of technology, technology-enabled and related growth industries, including semiconductors, software, cloud computing, transaction processing, IT infrastructure, cybersecurity, e-commerce and vertical-specific technology investments in the travel, transportation, healthcare, financial services and media sectors.

It is unclear how much of Fund VI has been deployed thus far.

Silver Lake partnered with sovereign wealth fund Mubadala in September for a long-term investment strategy. Mubadala made a $2 billion seed commitment to Silver Lake with a “deployment lifecycle” of 25 years. The capital will be invested across structures, geographies and industries in both early- and later-stage businesses.