Siris heads for $1 bln-plus first close on Fund IV

Siris Capital Group is heading for a first close on its fourth tech-focused fund targeting $3 billion, according to a person with knowledge of the firm.

The first close should happen before year end and could come between $1.1 billion and $1.2 billion, the person said.

Fund IV, in market since the fall, has a $3.5 billion cap. Park Hill Group is placement agent.

A spokesperson for Siris did not return a request for comment.

Siris has an interesting strategy: It targets mature tech companies with legacy brands that are trying to develop new products. The legacy business is viewed as the cash generator, or “bond” portion of the deal, Buyouts previously reported.

The new, more speculative products the firm considers the “call option” part of the investment, Buyouts reported.

One of the firm’s founders, Peter Berger, earlier this year said during a talk at Columbia University that the firm sources 90 percent of its investments.

Siris was formed by Berger, Frank Baker and Jeffrey Hendren, all of whom worked together at Ripplewood Holdings in the 1990s. The three spun out to join hedge fund S.A.C. Capital Advisors in 2007, investing out of a side-pocket vehicle they set up.

Siris closed its third fund in 2015 on $1.81 billion. It closed Fund II, its first institutional fund, on $651 million in 2011. Fund III was generating a negative 1 percent net internal rate of return and a 1x multiple as of March 31, 2017, California Public Employees’ Retirement System says.

Siris II was generating a 21.5 percent net IRR and a 1.5x multiple as of that date, according to CalPERS’s numbers.

Last month, Siris closed its acquisition of Intralinks, which provides secure data sharing, for about $1 billion.

Action Item: Check out Siris’s Form ADV here: http://bit.ly/2BYultH

Photo of Frank Baker sourced from Siris website