Thoma Bravo, a private equity firm focused on technology and software, has collected $22.8bn from investors for three funds in one of the largest tech-focused private equity fundraising hauls to date.

The Chicago-based private equity firm collected $17.8bn for its flagship buyout fund, Thoma Bravo Flagship Fund XIV, making the new vehicle more than 41% larger than its predecessor, which closed with $12.6bn in January 2019.

At this size, the new flagship fund ranks as the largest tech-focused buyout fund ever raised by an independent private equity firm and tops a $16bn pool raised last year by fellow software-focused firm Vista Equity Partners.

Thoma Bravo, which invests in software and technology-enabled services businesses, also collected around $3.9bn for its Thoma Bravo Discover Fund III to back midsize enterprise software and technology businesses and around $1.1bn for Thoma Bravo Explore Fund, which targets small businesses in the sector.

The nine-month long fundraising process was “almost completely virtual,” according to Jennifer James, managing director and head of investor relations and marketing at Thoma Bravo, who said that nearly all existing investors in Thoma Bravo’s previous funds committed capital in the latest fundraising.

The firm counts among its backers some of the largest U.S. state pension managers, including New York State Teachers’ Retirement System, Washington State Investment Board and State of Wisconsin Investment Board, according to pension disclosures.

The coronavirus pandemic has been a minor distraction for well-known private equity managers with strong track records, and investors have sought established firms in an environment where it has been impossible to hold in-person meetings with newer managers.

Thoma Bravo also benefited from strong investor appetite for technology investments, especially as the pandemic has accelerated digital transformation across all industries. Technology companies accounted for over 46% of the more than $100bn of US sponsor-led deals in 2020 through 5 September, according to data provider Dealogic.

“Very few private equity firms have focused on software for as long as Thoma Bravo, and because of that we are well positioned to lead the future of software investing at such an exciting time in the industry,” said Orlando Bravo, founder and managing partner at Thoma Bravo.

Thoma Bravo has been active this year, with portfolio realizations representing over $20bn in combined enterprise value, according to the firm. In September, the firm completed an $11bn sale of Ellie Mae to Intercontinental Exchange, the owner of the New York Stock Exchange. Before that it sold its interest in mainframe application developer Compuware to BMC Software Inc., an enterprise software provider backed by KKR.

Thoma Bravo traces its roots to Chicago-based buyout shop Thoma Cressey Equity Partners —which later changed its name to Thoma Cressey Bravo—before it launched to focus solely on technology and software deals.

The new funds closings bring Thoma Bravo’s assets under management to more than $70bn.

Source: Private Equity News

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