Sumeru closes debut fund on $1.1bn

Silver Lake's middle market investment group has concluded its first fundraising effort, having made three investments to date.

Silver Lake Sumeru has closed its inaugural fund on $1.1 billion (€712 million), surpassing its $750 million target after roughly 11 months in the market.

“We seek transformational opportunities where we can change the trajectory of the company,” Sumeru’s head, Ajay Shah, told PEO.

Like its mega-buyout parent, Sumeru targets growing technology and technology-enabled companies in the hardware, software, internet and technology oriented services sectors.

Ajay Shah

Sumeru was brought under Silver Lake’s umbrella in December 2006, when the Silicon Valley buyout firm absorbed Shah Capital, a tech-focussed private equity firm founded in 2004 by Shah. The $300 million Shah Capital fund continues to be managed separately from Silver Lake.

“We have quite a few LPs in common with the Silver Lake Partners funds,” said Shah. “Many of our investors from Shah Capital also invested in Silver Lake Sumeru.” A mix of domestic and international limited partners in the fund include public and corporate pension funds, endowments, foundations, funds of funds and high net worth individuals including technology company executives.

Sumeru raised the fund without the help of a placement agent beginning approximately nine to 11 months ago. The fund has not been in active fund raising for roughly three months.

Shah said the firm is in no rush to deploy the fund’s capital. “We are driven by the opportunity set and not the clock.”

The Sumeru fund will make approximately 12 to 15 investments between $50 million and $150 million on average, though Shah noted the number of portfolio companies could vary.

The fund has agreed three investments to date. Sumeru’s debut deal was the acquisition of a majority stake in privately held mobile phone marketing company Mobile Messenger in October 2007.

In April, Sumeru agreed to provide an undisclosed amount of equity financing to support the merger of Audio Visual Innovations and Signal Perfection. The new company, AVI-SPL, is a provider of global audio video systems and integration services.

The same month, the firm agreed the $185 million acquisition of i2, a unit of decision-making technology and information company ChoicePoint.

Silver Lake closed its third buyout vehicle on $9.3 billion in March, a steep increase from its second fund, which closed on $3.6 billion in April 2004.