Crosspoint raises bulk of second fund despite headwinds

Despite challenges unique to the firm and in the broader fundraising market, emerging tech investor Crosspoint Capital raised the majority of its target for its second fund, according to sources and SEC documents.

With its impressive haul, Crosspoint’s experience differs from other newer managers, who have struggled to attract capital from LPs content to stick with their deepest relationships. Emerging manager fundraising is more challenging than ever in the muted fundraising environment.

Crosspoint, formed in 2019, has raised around $1 billion for its second fund, which is targeting $1.5 billion, according to a source with knowledge of the firm. The firm could hold a final close for Crosspoint Capital Fund II in July, one of the sources said.

Crosspoint’s Form ADV showed it advised around $2.1 billion as of December 31, 2022. Crosspoint closed its debut fund on about $1.3 billion in 2021 in what was one of the largest-ever first-time fund closes.

No one from the firm responded to a comment request this week. Crosspoint is working with PJT Park Hill as placement agent on the process.

Crosspoint came back to market with its second fund last year and immediately faced challenges with two executives, Ian Loring and IR chief Emily Melchior, departing. Crosspoint had hired Loring from Bain Capital in 2020, where he co-led tech investing. Loring joined ex-Vista Equity number two Brian Sheth’s new firm Haveli Investments, last year.

Loring’s departure triggered a key person provision in the fund, which LPs voted to waive to allow Crosspoint to continue investing its debut fund.

The loss of senior level executives ahead of a fundraising can be a significant roadblock to a new firm’s ability to attract capital. However, Crosspoint was able to quickly amass commitments from a concentrated group of LPs, including some investors who couldn’t get into the first fund, a person with knowledge told Buyouts.

Crosspoint also brought on more private equity talent, in 2021 hiring Laura Grattan from Thomas H. Lee Partners and Dan Stanko from HGGC.

The firm, led by Greg Clark, is a sector specialist, targeting cybersecurity and infrastructure software. Its expertise has been a selling point with LPs, who have flocked more to sector specialization in recent years.

The principal owners of Crosspoint’s management company all came from the tech industry. Clark is the former CEO of cybersecurity business Symantec, while managing partner Steve Luczo is former CEO and chairman of Seagate Technology and Matt MacKenzie, managing partner, formerly worked as SVP and chief of staff of Symantec.

The firm in May agreed to acquire cybersecurity provider Absolute Software for an enterprise value of $870 million, the company said in a statement. The firm also in May led a 65 million euro Series A follow-on funding in Everseen, which provides AI-powered automation services.