Silver Lake shoots past $18bn target for Fund VI

Silver Lake Partners VI will write equity checks of up to $1.25bn, pension documents show.

Silver Lake has exceeded the target set for its sixth flagship offering amid the global health pandemic.

The Menlo Park-based tech-focused private equity firm last week filed a Form D fundraising document showing Silver Lake Partners VI collected more than $18.27 billion. This brings the figure to above the anticipated final tally of $18 billion, reported last month by sister title Buyouts.

Fund VI is not as yet wrapped up, according to a person with knowledge of the matter. Silver Lake declined to comment.

At its present level of commitments, Fund VI is the largest fund in Silver Lake’s more than two-decade history. It is 22 percent bigger than its predecessor, which closed three years ago on $15 billion.

More than 400 limited partners signed on to Fund VI, the Form Ds show. Disclosed LPs include Florida Retirement System Trust Fund which committed $175 million; Los Angeles County Employees’ Retirement Association, Teacher Retirement System of Texas and Teachers’ Retirement System of the State of Illinois, each of which supplied $200 million; and New York State Teachers’ Retirement System, which committed $300 million.

Silver Lake’s fundraising is benefiting from an LP flight to quality, whereby large institutions re-up only with their best-performing PE relationships. The dynamic is helping keep PE fundraising fairly robust, even as other managers extend or pause activity.

Fund VI will pursue large-cap investments in companies in the tech, tech-enabled and related growth sectors, according to a report issued by New Jersey Division of Investment. It will make 15 to 25 investments, writing initial equity checks of $400 million to $1.25 billion. Target opportunities include buyout deals, structured minority investments, and acquisition and debt financings.

Silver Lake is led by Egon Durban and Greg Mondre, who in December were appointed the firm’s first co-chief executives. Ken Hao was at the same time made chairman, while Joe Osnoss was promoted to managing partner. The four, who have been with the firm since or shortly after its founding, are Fund VI’s key principals.

Silver Lake’s leadership team oversees more than 100 investment and operating professionals located in offices in North America, Europe and Asia.

The firm had generated a 19.2 percent net internal rate of return and a 1.8x net multiple across five funds as of 22 May, according to the NJDI report. Fund V was generating a 14.6 percent net IRR and a 1.16x multiple as of December.

Dyal Capital Partners, the GP stakes affiliate of Neuberger Berman, in 2016 acquired a minority interest in Silver Lake.