TA Associates holds ‘one-and-done’ on largest growth equity fund this year

Fund XIII is 60% larger than its predecessor and was raised in a matter of months.

TA Associates has held a first and final close on its latest fund at its $8.5 billion hard-cap, making it the largest growth equity fund raised so far this year.

The firm launched TA XIII in the first quarter of this year with a $7.5 billion target. The final amount raised is 60 percent larger than that of Fund XII, which closed on $5.3 billion in 2016, and more than double the size of Fund XI, which closed on $4 billion in 2013.

Several institutional investors including Washington State Investment Board, Tennessee Consolidated Retirement System, New Mexico State Investment Council, Taiwan Life Insurance and China Life Insurance Company (Taiwan) committed to TA’s latest fund, according to PEI data.

Growth equity strategies have enjoyed their best start to the year for fundraising since at least before the global financial crisis. Firms collected $24.9 billion across 23 growth equity funds in the first quarter of 2019 – the best first quarter for growth equity since PEI records began in 2008.

This is expected to continue: 29 percent of LPs surveyed for PEI’s LP Perspectives 2019 plan to increase their allocation to the strategy in 2019.

In March, Summit Partners closed its Fund X at $4.9 billion – almost 50 percent larger than its ninth fund, which closed on $3.3 billion in 2017. Providence Strategic Growth (PSG), which focuses on growth equity investments in lower mid-market software and technology-enabled companies, also came back to market with Fund IV targeting $2 billion, less than a year after closing its third fund at $1.2 billion.

The strategy is also getting attention from the industry’s largest asset managers. Blackstone launched its growth equity platform in January and will begin fundraising for a dedicated growth equity fund later this year, the firm said on its 18 April earnings call.

Meanwhile, Warburg Pincus is seeking $13.75 billion for its Warburg Pincus Global Growth-E fund, according to PEI data.