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TA Associates LPs enjoy run of partial exits; get second bite of apple

  • Why Is This Important: Firm sees partial recaps as “great approach to seller’s market”

Gamma Technologies last month said it had agreed to sell a stake to private equity shop Cove Hill Partners, marking one of four partial exits so far this year for growth-equity specialist TA Associates.

TA Associates, which has more than 70 active portfolio companies, would remain the largest shareholder in the provider of engineering-simulation software should the deal close at the end of this month as expected.

Speaking June 8 at a TA Associates-hosted lunch in New York for journalists, Brian Conway, chairman and managing partner, said the firm completed four partial exits last year, compared with 10 full sales.

The firm typically deploys what it terms “partial recaps” as a way to take money off the table on deals that are tracking ahead of plan.

“I think it’s a great approach to a seller’s market right now,” Conway said, adding that the firm can often recoup 1x to 2x or even more of its investment through partial recaps — giving a nice boost to a fund’s IRR.

Other portfolio companies that TA Associates has recently partly exited include business-services company DiscoverOrg (Carlyle Group invested); technology company Nintex Global Ltd (Thoma Bravo); and software company Mitratech (HGCapital).

TA Associates closed its 12th flagship fund at $5.3 billion in 2015, according to Dow Jones, which has reported Commonfund, Hamilton Lane, University of Chicago and Virginia Retirement System as LPs in prior funds.

Action Item: Review the TA Associates portfolio at https://www.ta.com/portfolio