Silver Lake piles up $19bn for latest flagship, stays on fundraising trail

Silver Lake amassed $19.2 billion for a seventh flagship technology offering, despite ongoing headwinds in fundraising.

The private equity firm in recent days reported the haul of Silver Lake Partners VII in Form D fundraising documents.

The vehicle does not have a target, sources told Buyouts. It will continue raising capital, they said, with Silver Lake expected to announce a final closing before the end of the year. The firm declined to comment.

Fund VII’s predecessor was closed in December 2020 at $20 billion, ahead of an $18 billion target.

Slower fundraising since 2022, caused primarily by overstretched LPs, has led many private equity GPs to lengthen their timelines and rethink their ticket sizes. In its first-quarter earnings call, Carlyle adjusted its forecast to include a “lower buyout fundraising outlook.”

While technology veterans like Silver Lake are not immune to these circumstances, several of the largest of them seem to be persevering. Thoma Bravo, for example, in December 2022 closed a 15th flagship offering at $24.3 billion and is already planning the launch of a successor, Buyouts reported.

Part of the explanation lies in the enduring nature of sector opportunities. While technology took a major economic hit last year, driving down once lofty valuations, digital adoption is viewed as having strong secular tailwinds that will continue to expand its investable universe for the foreseeable future.

Silver Lake’s strategy focuses on making large-scale investments in global technology, technology-enabled and related growth sectors, according to its ADV filings.

Target companies generally have enterprise values ranging from $500 million to $20 billion or greater. Business characteristics of interest include a sustainable model with low disruption risk, recurring revenue, leadership in a market space with few new entrants, and unit economics that result in cash yield.

Through a variety of deal types, such as buyouts, carveouts, recaps and turnarounds, Silver Lake invests equity of $200 million to $2 billion or more per transaction.

In a challenging deal market, Silver Lake has been steady in its pursuit of fresh opportunities. In March, it and Canada Pension Plan Investment Board announced their acquisition of Qualtrics, a US customer experience management software provider, from majority owner SAP and others. The purchase price is $12.5 billion.

The firm has also been reportedly vying with competitors to acquire Software AG, a German enterprise integration software solutions provider. This month, the company supported Silver Lake’s increased bid, valuing it at €$2.4 billion ($2.6 billion).

Founded in 1999, the $95 billion Silver Lake is led by co-CEOs Egon Durban and Greg Mondre. The firm reports its aggregrate portfolio as having a $1 trillion-plus enterprise value, as generating $282 billion of annual revenue, and as employing 713,000 people.