It’s difficult to disagree with Romesh Wadhwani when he says that no one has more operational expertise in software and services than his investment firm,
All told, Wadhwani was founder and CEO of three enterprise software companies before he took his personal fortune and launched Symphony, which makes control investments in software and information services companies. Wadhwani says that the first fund has seven companies in its portfolio with a combined market value of $1.5 billion.
Last year, Wadhwani created a second fund. Again, he contributed money from his personal fortune, $400 million to be exact. And he also raised an additional $500 million from eight limited partners. The second fund has already invested in three companies. Wadhwani says that it took less than five months to raise the $900 million vehicle.
PE Week Managing Editor Alastair Goldfisher caught up with Wadhwani earlier this month before he left on a 13-day trip to visit portfolio companies in India and China.
Q: By your own admission, you were under the radar when you were investing from your first fund. Why are you now trying to increase your visibility?
When it was my own capital, what did we need the publicity for?
But now, yes, our aim is to raise our profile.
Q: Does better visibility help with deal flow?
It does help communicate our approach to private equity, and our team’s software expertise, as compared to other firms.
And we are seeing a lot of in-bound deal flow, meaning that the calls we are getting are unsolicited, with no bankers involved. We love those calls, because it means we’ll have the support of the management team. And it means that the company is committed and they see us as a great option, as opposed to other firms.
Q: What’s your long-term view on the economy?
The economy will continue to flounder for another two to three years as stocks decline.
We invest only in companies with revenue [target companies have annual sales of between $100 million and $500 million], not any startups. And we see many companies in the software and services space that will face difficult times ahead. Hopefully, we can help many them grow and expand to the next step.
Q: Are you having fun investing, compared to all your years in operations?
Yes, this is fun. I am working as hard now as I ever did before.
I’ve heard it said that when the economy is down, a lot of private equity investors take advantage to improve their golf game. I don’t even play golf.
Q: Do you consider yourself lucky or good?
The sale of Aspect closed in March 2000 when the Nasdaq stock market was at is peak. So if you have to choose between being smart or lucky, you choose lucky.