Silver Lake strikes again with $3.6bn fund

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.