Rubicon set to hit $1.2bn hard-cap on next tech fund as economy stumbles

Despite the horror show that is the economy right now, some private equity funds are getting raised.

Case in point: Rubicon Technology Partners is set to close its third fund on its hard-cap of $1.2 billion, a person with knowledge of the firm told Buyouts.

Rubicon will beat its $850 million target for Fund III, the person said. It launched fundraising last fall, so if it officially closes soon, it will have raised the pool in under a year. Park Hill Group worked as placement agent on the fundraising.

The firm was lucky in the sense that it launched and managed to raise the bulk of its capital before coronavirus really hammered the US economy. Rubicon is also a firm that enjoys strong demand from the LP world, putting it in the category of funds that, according to several sources, will still get raised even in the downturn.

Most funds in market, or coming to market, will experience a “three-to-six month delay,” according to Stuart Blair, director of research at Canterbury Consulting. “Maybe that won’t be the case for some of the bigger funds and the brand names.”

Other funds in market expected to have strong fundraising processes include Spectrum Equity and Silver Lake, which could target up to $20 billion for its next flagship pool this year.

Rubicon, formed in 2012, enjoyed strong demand for the pool. The firm makes control equity investments of $30 million to $75 million in software companies with proven management teams. The firm closed its debut fund on $305 million in 2014, beating its $250 million target.

The firm’s principal owners are John Hodge, formerly a senior managing director and senior advisor in Blackstone’s technology group; Andrew Gesell, who formerly worked at Court Square making technology and telecom investments; and Steve Carpenter, who worked at Ventyx, a division of ABB, where he was chief executive officer.

Rubicon raised at least $536.8 million for its second fund, according to a Form D fundraising document in 2017. Rubicon II was generating a 27.7 percent internal rate of return and a 1.26x multiple as of June 30, 2019, according to performance information from Florida State Board of Administration.

Fund I was producing a 20.3 percent IRR and a 1.73x multiple as of the same date, according to Florida information.

Earlier this month, Rubicon invested in OutMatch, which helps companies find and develop talent.

Action Item: Reach John Hodge here: john@rubicontp.com