Firms & Funds

Silver Lake eyes $4bn for sophomore structured equity effort

The Alpine funds focus largely on the downside-protected portion of a company’s capital structure, but also will invest with equity components like convertible securities, options, warrants and preferred stock.

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Silver Lake is preparing to raise the next installment of its credit and structured equity fund, a strategy that it launched a few years ago, sources told Buyouts.

Silver Lake Alpine II will target $4 billion, sources said. It’s not clear if the fund is officially in the market yet. Park Hill Group is working as placement agent on the fundraising.

A Silver Lake spokeswoman declined to comment.

Alpine targets large-cap technology, tech-enabled and related growth companies, according to Silver Lake’s Form ADV. The funds focus largely on the downside-protected portion of a company’s capital structure, but also will invest with equity components like convertible securities, options, warrants and preferred stock, the Form ADV said.

Silver Lake “believes that … Alpine’s flexible investment program will allow it to selectively structure investments in target companies with potential yield from current or accrued income and a lower risk of principal loss than a traditional private equity investment, coupled with upside potential over an expected two-to-five-plus year holding period on average,” the Form ADV said.

Silver Lake closed the debut Alpine fund on $2.5 billion. It’s not clear if a specific executive or executives lead the fund family. Silver Lake’s general leadership is listed on the Form D fundraising document for Fund I, though the firm held a leadership succession at the end of last year.

Egon Durban and Gregory Mondre were named co-CEOs, and Michael Bingle, managing partner, transitioned to vice chairman, while Managing Partner Kenneth Hao moved into the chairman role.

With the leadership shift that took place in December it’s not clear if different executives will be leading the strategy. Silver Lake’s Waterman funds, which targets growth investments in pre-IPO, later-stage technology companies, is led by Shawn O’Neill as managing director and group head.

The firm, meanwhile, is gearing up to raise its sixth flagship fund that could raise up to $20 billion, Buyouts previously reported. Silver Lake also is raising its third Waterman fund, targeting $750 million, Buyouts reported.

Action Item: Check out Silver Lake’s Form ADV here: https://bit.ly/2uMKe4W