JMI Equity surpassed the target on its 10th software-focused fund and set a new one, according to a Form D, reflecting strong investor interest in the sector during the coronavirus pandemic.
Last month, Buyouts reported the original target for JMI Equity Fund X was $1.3 billion, according to a December Form D fundraising document filed with the SEC.
On February 17, the firm filed a new Form D, indicating it had raised just under $1.5 billion and was now targeting $1.7 billion. A total of 142 investors had committed to the fund.
JMI’s strategy is focused exclusively on software, which along with most technology investments has seen extremely favorable headwinds during the coronavirus pandemic as many companies have instituted work-from-home policies.
The firm tends to target companies with more than $10 million in revenue and to make investments of between $25 million and $150 million. The firm can take majority or minority positions.
The firm’s previous fund, JMI Equity Fund IX, closed on $1.2 billion in 2018. According to the California State Teachers’ Retirement System website, as of March 31, 2020, Fund IX had a 1.38 percent internal rate of return. The fund is still in its J-curve, a period early in a fund’s life before investments mature.
According to JMI’s Form ADV, JMI’s carried interested is generally the industry standard 20 percent. Management fees start at 2 percent and decrease by 10 percent per year after a fund’s investment period.
Through a spokesman, JMI declined to comment for this story.
Action Item: read JMI Equity’s form ADV here.