Sunstone Partners Raises $925m Fund III

Sunstone Partners, a growth-oriented private equity firm, announced the final institutional close of its oversubscribed $925m third fund, Sunstone Partners III, at its hard cap.

Fund III, which more than doubles the total committed capital managed by Sunstone Partners, is the firm’s largest fund to date and brings total committed LP capital to $1.7bn since inception in 2015.

Sunstone Partners received strong support from its existing investor base of leading endowments, foundations, family offices, fund-of-funds and pension funds, while also adding a number of new institutional investors.

“We are incredibly grateful to our existing LPs for their continued support and excited to welcome and work with our new investors,” said Gustavo Alberelli, Managing Partner at Sunstone Partners. “Their strong support is a validation of our investment strategy, overall performance, and team we are building at Sunstone Partners.”

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Consistent with the strategy of prior funds, Sunstone Partners will focus on growth equity and growth buyout investments in profitable technology-enabled services and software companies, typically founder-owned. Sunstone Partners targets investments of $50 million to $150 million of equity capital per portfolio company. The firm has deep expertise in several sectors including cloud services, health care IT, cybersecurity and marketing technology.

“We have a thesis-based investment approach focused on partnering with exceptional founders to help them scale their businesses and accelerate their growth,” said Arneek Multani, Managing Partner at Sunstone Partners. “We look forward to continue adding value to the businesses we invest in by utilizing our sector expertise, providing operational resources to drive growth initiatives, and focusing on follow-on add-on acquisitions.”

Since its inception in 2015, Sunstone Partners has made 39 investments, including 13 platforms and 26 add-ons. Sunstone has achieved full or partial realizations on its first three platform investments: Onica, a cloud consulting and managed services company, which was acquired by Rackspace in 2019; UserZoom, a SaaS platform focused on the digital user experience and usability testing, which was acquired by Thoma Bravo in 2022; and NETSPI, a leader in enterprise penetration testing and attack surface management, which announced its acquisition by KKR in October 2022.

“The growth that Sunstone Partners has achieved is a testament to the hard work and commitment of our expanding team, currently 35 professionals,” said Mike Biggee, Managing Partner at Sunstone Partners. “We are excited about the opportunities that this new fund will provide to the members of our Sunstone team and portfolio companies.”

Sunstone seeks to partner with exceptional entrepreneurs, typically as their first institutional capital partner, to accelerate organic growth, develop strategy, and fund acquisitions. Sunstone Partners has been recognized on Inc. magazine’s “Founder-Friendly Investors” list in each of the last three years. This recognition is a testament to the firm’s collaborative portfolio engagement approach aimed at enabling companies to thrive through support of the management team, active strategic guidance, and execution of operational best practices.

Source: Business Wire

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