Silver Lake wraps third fund on $9.3bn

The US firm has closed its third, tech-focussed buyout fund slightly below its $10 billion target, but it is more than double the size of its predecessor vehicle.

Silver Lake has closed its third buyout fund on $9.3 billion (€6.1 billion), sources at Merrill Lynch, the fund’s placement agent, have confirmed.

Though the sources wouldn’t discuss the tech-focussed vehicle’s marketing time frame, they said “it was relatively short given the size of fund raised”.

Silver Lake’s initial target for the fund was $10 billion – a steep increase from its second fund, which closed on $3.6 billion in April 2004. Limited partners in past vehicles have included the Illinois State Teachers' Retirement System, the New Jersey Division of Investment, the Indiana Public Employees Retirement Fund and Finnish insurance firm Ilmarinen Mutual Pension Insurance Company.

Glenn Hutchins

The firm’s new middle market affiliate, Sumeru, is raising its debut fund, also tech-focussed, with a $1 billion target.

A Silver Lake spokeswoman did not return a request for comment by press time.

Recently the California-based Silver Lake joined the handful of private equity firms selling stakes in their management companies to institutional investors. In January, the California Public Employees' Retirement System paid an estimated $275 million for a 9.9 percent stake in the firm.

Silver Lake was founded former Blackstone Group and Thomas H. Lee partner Glenn Hutchins along with Jim Davidson, previously the head of the Technology Investment Banking business at Hambrecht & Quist, and David Roux, formerly chairman and chief executive of Liberate Technologies, executive vice president at Oracle and senior vice president at Lotus Development.

The firm has offices in Silicon Valley, San Francisco, New York and London.