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Francisco Partners sets sights on $2 bln for Fund IV

Firm: Francisco Partners

Fund: Francisco Partners IV

Target: $2 billion

Hard Cap: $2.5 billion

Francisco set a hard cap of $2.5 billion and projects a final close by early next year.

The Oklahoma Police Pension and Retirement System committed $10 million to fund IV as a first-time LP last month, according to a memo from its Sept. 17 meeting.

Francisco plans to make between 20 and 25 equity investments ranging from $30 million to $250 million, according to an investment memo prepared for Oklahoma by Asset Consulting Group. Thedocuments state that the fund is targeting an IRR of 15 percent to 20 percent. 

The fund includes a base management fee of 150 basis points on capital commitments during the investment period, and 125 basis points on contributed capital less the portion attributable to investments that have been disposed of or written off, the fund document said. The minimum investment for the fund is $10 million, the document states.

Francisco’s new fund comes three years after it raised $2 billion for Francisco Partners III LP. That fund generated a 1.3x investment multiple and an IRR of 18.2 percent as of March 31, according to the California Public Employees’ Retirement System, an LP in Fund III. The firm’s vintage 2006 Francisco Partners II LP logged a 12.9 percent IRR and an investment multiple of 1.6x as of the same date, according to CalPERS.

A spokesman for Francisco Partners was not immediately available for comment.

In an interview with Buyouts in January, Dipanjan “DJ” Deb, Francisco’s managing partner, said the firm avoided excessive leverage during the years prior to the financial crisis, which helped its portfolio companies navigate the downturn.

“The thing we’re most proud of is the multitude of winners, rather than one home run conquering other sins,” Deb said in January. “FP II was a demonstration of our strategy of being able to invest in fast-changing technology markets in a low-beta manner. We maniacally focused on operational improvements, and [we structured] investments in a manner to reduce downside risk.”

Francisco’s areas of focus include software and services, security and systems, Internet, health care information technology, hardware and industrial, and communications.