Silver Lake’s mid-market team spins off 2 firms

Jim Davidson, co-founder, managing partner and managing director at Silver Lake, confirmed earlier press reports that the firm no longer plans to raise a followup fund to Silver Lake Sumeru Fund LP, the $1.1 billion vehicle raised in 2008 that targets mid-market deals for the West Coast firm. He said the firm told LPs about a year ago.

Ajay Shah, a founding managing partner of Silver Lake Sumeru, decided to focus on charitable work in India, causing Silver Lake to reconsider the vehicle, he said.

“We didn’t think we could justify raising a $1 billion fund without rebuilding the team,” Davidson told about 100 alternative investment pros on Sept. 19 at the PartnerConnect LP-GP Summit in New York.

Hollie Moore Haynes is now a co-founder and managing partner of Luminate Capital Partners, a mid-market private equity firm focusing on the sofware sector. John Heyman also is co-founder and managing partner of the new firm. He was formerly the CEO and CFO of Radiant Systems, which sold to NCR Corp for $1.2 billion in 2011, according to his bio the the Luminate Capital Partners website. He is also executive chairman of Medseek Inc, a software-as-a-service company in the healthcare sector that is listed as a portfolio company of Silver Lake.

Meanwhile, Kyle Ryland, managing director at Silver Lake, is heading up a separate firm under the name Sumeru, minus the Silver Lake monicker in front of it.

“I’m a reference and a personal investor” in the firms, Davidson told Buyouts. He mentioned that the firms planned to raise funds of their own, but he offered no further details.

Davidson provided the update during a keynote talk at the conference when asked about what the firm was doing in the middle market since its $10.3 billion flagship fund, Silver Lake Partners IV, is focused on larger deals. Silver Lake closed Fund IV in April 2013.

Davidson said Silver Lake starts out each fundraising cycle by asking executives if they are planning to commit fully to a new pool.

Ryland, Shah and Haynes remain listed on the Silver Lake website as executives for Silver Lake Sumeru, which has invested in 10 platform companies including BlackLine Systems, ForeFlight and Locaweb.

Other executives on the Silver Lake Sumeru team include John Brennan, managing director, and Paul Mercadante, managing director.