Silver Lake seeks $7.5bn for next fund

A little more than a year after its blockbuster exit from Skype, Silver Lake has launched its fourth fund targeting $7.5bn.

Silver Lake has launched its latest flagship private equity fund targeting $7.5 billion, according to documents filed 9 July with the US Securities and Exchange Commission. 

The firm’s Partners business typically invests in large-cap technology or technology-enabled service companies. Silver Lake’s previous Partners fund focused on leveraged buyout and recapitalisation strategies, with an emphasis on businesses considered to be under-managed, according toUniversity of Michigan documents. The University endowment committed $30 million to Silver Lake Partners III in 2006.

That fund has been performing well, having generated a 19.7 percent net internal rate of return and a 1.5x return multiple as of 31 December, according to the California Public Employees’ Retirement System

A spokesman for Silver Lake did not respond to a request for comment at press time. 

Last year, the firm notched an $8.5 billion exit from its stake in Internet messaging service Skype — one of the most successful private equity exits in history. Silver Lake led a consortium of investors in the $1.9 billion acquisition of the company in 2009. Venture capital firm Andreessen Horowitz, the Canada Pension Plan Investment Board and company founders Niklas Zennström and Janus Friis also held stakes.  

The consortium first pursued an initial public offering for its Skype exit, but later shut down that effort when Microsoft offered to purchase the company. 

In addition to Skype, Silver Lake has also invested in web domain service Go Daddy, the Alibaba Group, Israeli technology provider PrimeSense, Interactive Data and Sabre Holdings. 

Silver Lake joins a handful of other mega-firms seeking capital this year, including Kohlberg Kravis Roberts, which launched its 11th North American fund targeting between $8 billion and $10 billion, and The Carlyle Group, which is seeking $10 billion for its sixth fund. 

The firm was founded in 1999 by Jim Davidson, Glenn Hutchins and David Roux. Silver Lake has around $14 billion in assets under management and maintains offices in San Francisco, Menlo Park, New York, London, Hong Kong and Tokyo.