Thoma Bravo, a private equity firm focused on technology and software, later this fall aims to wrap up fundraising for three funds, which could potentially haul in a total of more than $21bn, according to people familiar with the matter.

The funds would rank as one of the largest tech-focused pools of capital collected to date and place Thoma Bravo among the private equity firms benefiting from strong investor appetite for technology investments, despite the challenges presented by the coronavirus pandemic. In early June, Francisco Partners announced it had raised nearly $10bn for three new tech-focused funds.

As of 6 July, a total of 33 technology-focused funds had amassed $30.1bn, WSJ Pro Private Equity previously reported, citing data from Preqin.

Thoma Bravo has raised the bulk of the capital so far for its flagship buyout fund, Thoma Bravo Fund XIV LP, which has received investor interest in excess of its target and has no set upper limit or hard cap, the people said. A May filing with the Securities and Exchange Commission indicates the fund is seeking $16.5bn. That amount is almost 31% larger than that of its predecessor, which closed at $12.6bn in January 2019. At that size, Fund XIV would be among the largest tech-focused buyout funds raised to date.

The Chicago-based firm typically invests its flagship funds in software and technology-enabled services businesses with enterprise values of more than $800m, according to documents from the Rhode Island State Investment Commission, a public pension manager that backed the fund.

Thoma Bravo also has collected around $3.5bn for its Thoma Bravo Discover Fund IV LP, which is focused on midsize enterprise software and technology businesses, and around $1.3bn for Thoma Bravo Explore Fund LP, which targets small ones, the people said.

Investor appetite for Thoma Bravo’s flagship offering was bolstered in part by the sale of mortgage software firm Ellie Mae early in August to Intercontinental Exchange, the owner of the New York Stock Exchange, the people said. The deal valued Ellie Mae at $11bn, including debt, and came only a little more than a year after the private-equity firm acquired Ellie Mae in a $3.7bn deal. The transaction resulted in a big liquidity event for investors in Thoma Bravo Fund XIII LP, they added.

Investors that have disclosed commitments to one or more of Thoma Bravo’s newest funds include Teachers’ Retirement System of Louisiana, Los Angeles Fire and Police Pensions, Orange County Employees Retirement System, Los Angeles County Employees Retirement Association, Arkansas Teacher Retirement System and Washington State Investment Board, according to WSJ Pro Private Equity data.

Thoma Bravo traces its roots to Chicago-based buyout shop Thoma Cressey Equity Partners Inc. before it launched to focus solely on technology and software deals. As of 31 December, the firm managed a little more than $45bn in assets, according to its latest registered investment adviser filing.

 Source: Wall Street Journal

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