Thoma Bravo closes Fund XII on $7.6bn hard-cap

The fund is yet another Thoma Bravo investment vehicle to reach its hard-cap, and more than doubles the size of Fund XI.

Chicago-based Thoma Bravo has held a final close for its latest fund, which closed on its $7.6 billion hard-cap, the firm said in a statement.

Thoma Bravo Fund XII launched in November with a $7 billion target, according to PEI data. A source familiar with the matter told Private Equity International the firm was fundraising for Fund XII between December and September, and raised capital from a “standard mix” of investors, such as pensions, foundations, and endowments.

The hard-cap amount also reflects more than double the $3.65 billion raised by its previous fund, Thoma Bravo Fund XI.

A document from the Los Angeles City Employees’ Retirement System (LACERS), which committed $25 million, indicates Fund XII has a 10-year term, with a possible one-year extension at the general partner’s discretion, and two one-year extensions with the advisory committee’s consent. 

The document also said the fund is charging a 1.5 percent management fee and 20 percent carried interest, with no hurdle rate and at least $300 million of GP commitment.

Thoma Bravo said the fund, for which Kirkland & Ellis was legal counsel, was oversubscribed and will target deals of any size in the software and technology sectors. It will follow the “buy and build” strategy of its predecessors, investing in growth initiatives and seeking add-on acquisitions. The firm typically seeks companies with over $20 million in EBITDA, investing between $100 million and $750 million, or more, according to its website.

According to PEI data, investors in the fund alongside LACERS include the California State Teachers’ Retirement System, which committed $250 million; the Florida State Board of Administration, which committed $150 million; the Massachusetts Pension Reserves Investment Management Board, which committed $100 million; and the New York State Teachers’ Retirement System, which committed $200 million.

All five limited partners were also investors in the previous fund, Thoma Bravo Fund XI, according to PEI data.

The previous fund, Thoma Bravo Fund XI, launched in January 2014, targeting $2.5 billion, according to PEI data. In May of the same year, Thoma Bravo held the first and final close of that fund on its $3.65 billion hard-cap, according to PEI data. An earlier fund, Thoma Bravo Fund X, was generating a 34.2 percent net internal rate of return, as of 30 September, according to the same LACERS document mentioned above.

Since 2003, Thoma Bravo, which manages $17 billion and has offices in Chicago and San Francisco, has made over 140 acquisitions in the software and technology sectors. Most recently, it acquired data visualisation and analytics company Qlik, healthcare IT security company Imprivata, and supply chain network Elemica, according to its website. Ares Capital Corporation provided credit for the acquisition of Qlik, as reported by sister title Private Debt Investor.

Thoma Bravo purchased Qlik and Solar Winds, and is expected to complete the acquisition of Trader and Imprivata through Fund XII, the source said.

Last month, it also continued its 18-month hiring streak by appointing a partner, Hudston Smith, and two vice presidents, Matt Gilbert and AJ Jangalapalli, as reported byPEI.