Silver Lake strikes again with $3.6bn fund

The new vehicle is the largest private equity fund ever raised for investment in the technology sector.

Silver Lake Partners has announced the final close on its second private equity fund on $3.6 billion (€3 billion).

 

The Menlo Park, California- and New York-based firm’s new fund makes it the largest private equity buyout vehicle focused on large-scale investments in “mature technology” and related growth companies. SLP II exceeds its 1999 debut fund – which capped at $2.2 billion during the height of the tech craze – and zooms ahead of many other tech investors still hurting from the bust.

 

Silver Lake’s claim to fame came with its 2000 investment in disc-drive maker Seagate Technologies. When the company went public in one of 2002’s biggest – and few – IPOs, the firm saw a $1.5 billion return on its $300 million investment. Most recently, Silver Lake teamed with Bain Capital and Warburg Pincus in agreeing to buy UGS PLM Solutions, a software division of network storage giant EDS, for $2.05 billion. The firm is touting last month’s deal as the largest private equity tech purchase ever.

 

Silver Lake was founded and continues to be led by Glenn Hutchins, a former Blackstone partner; Jim Davidson, a former Hambrecht & Quist tech investment banker; and David Roux, a former Oracle executive.

 

Another co-founder, tech guru Roger McNamee, a venture capitalist at Integral Capital, has reduced his role at the firm as he prepares to co-launch a media and entertainment private equity fund along with outgoing Electronic Arts president John Riccitiello. According to news reports, the new fund is targeting the $1 billion (€829 million) range and is looking to close before the end of the year. Marc Bodnick, a Silver Lake director, is also expected to join the team.

 

Merrill Lynch & Co. served as placement agent for the fund.