Silver Lake reaffirms position at top of tech pile

With the close of its $15bn fifth fund, the firm has cemented its position as the dominant force in technology-focused private equity investment.

Menlo Park-headquartered Silver Lake has cemented its position as the largest technology-focused private equity firm in the world with the $15 billion final close of its latest flagship fund, Silver Lake Partners V.

The fund had a $12.5 billion target and the firm ultimately attracted LP commitments totalling $14.5 billion. The firm itself has made a $500 million general partner commitment, equivalent to around 3.3 percent of the total.

“What resonated with investors in this fundraise is what resonates with industry CEOs: Silver Lake’s flexible investment structures, conservative use of leverage, and an intensive focus on growth,” Susannah Carrier, global head of fundraising and investor relations for the firm, said in a statement. “[…] Silver Lake continues to strive for a culture of excellence and an alignment of interests with our limited partners to deliver superior investment performance. These goals have defined Silver Lake since its inception eighteen years ago and will continue to guide the firm in the years ahead.”

Silver Lake's fourth fund, which was raised in 2013, was generating an IRR of 30.5 percent as of 30 June 2016, according to data published by the California Public Employees' Retirement System, and an investment multiple of 1.3x. Its previous fund, a 2007-vintage, was generating 17.9 percent and 1.7x over the same time period.

This latest fundraise means that once again Silver Lake manages the largest private equity fund focused on the technology sector. It’s 2013-vintage fourth fund attracted commitments of $10.3 billion, which was the world’s largest until earlier this year when Austin, Texas-based Vista Equity Partners was revealed to have hit the $10.5 billion hard cap on its sixth flagship fund, although it was unclear at the time whether a formal final close had been held.

Both Silver Lake and Vista Equity Partners are themselves portfolio companies of Dyal Capital Partners, the private equity unit of New York-based investment manager Neuberger Berman that buys minority stakes in private equity and hedge fund management firms.

Investors in Silver Lake’s latest fund include Teachers' Retirement System of the State of Illinois, Teacher Retirement System of Texas, and South Dakota Investment Council, according to PEI data.