Silver Lake veteran seeks $700m for third software-focused fund

Luminate Capital's target for its third flagship fund is nearly three times larger than what it raised for its debut offering in 2017.

Luminate Capital Partners, a mid-market firm founded by a former Silver Lake managing director, is back on the fundraising trail with its third and largest fund focused on software and software-enabled business services.

The San Francisco-based firm is seeking $700 million for Luminate Capital Partners III, according to a source familiar with the fundraise.

Hollie Moore Haynes, who co-founded the tech investor’s mid-market strategy Silver Lake Sumeru in 2007, founded Luminate in 2014. Silver Lake Sumeru raised $1.1 billion in 2008 for its debut vehicle.

Luminate launched Fund III in July, the source said. Capital-raising efforts are expected to be conducted virtually, although the firm had initially met some investors before the US banned travel and closed down cities due to the global pandemic, the source added.

Luminate declined to comment on fundraising.

Fund III’s target is 75 percent larger than the target of its predecessor vehicle, which closed on $425 million in 2018. Luminate closed its oversubscribed inaugural fund in 2017 with more than $265 million of capital commitments, according to a statement from the firm at the time.

Limited partners in its funds include New York State Common Retirement Fund, Teagle Foundation and Exelon Corporation, according to PEI data.

Capital raised for the vehicle will follow the strategy of Luminate’s earlier funds, making investments of up to $50 million in growing enterprise software companies in the US.

More than 800 tech-focused funds in market globally are targeting more $121.3 billion among them, according to PEI data. These include Thoma Bravo Fund XIV, which is nearing a final close on its $16.5 billion target, according to a report from The Wall Street Journal and Vista Foundation Fund IV, which is targeting $3.25 billion.