Summit Partners has closed two new funds, a private equity fund and a venture capital fund, totaling $3.3bn. The funds will be used to invest in later stage companies in North America and Europe in a broad range of industries.
The $3bn Summit Partners Private Equity Fund VII will make investments from $25m to $450m per company in both Europe and the US. The $300m Summit Partners Venture Capital Fund II will make investments from $5m to $25m per company, targeting mainly US companies.
The investors in the new funds include public and private pension funds, university endowments, financial institutions, corporations, and previously financed Summit Partners’ entrepreneurs. More than 85% of the capital raised in these funds was provided by investors in previous Summit funds.
Scott Collins, a general partner who manages Summit’s London office, said: “The vast majority of the fund are US investors, but there was a growing proportion of European LPs, of which many were thirsty for exposure to US private equity. In this fund we had an objective to increase the proportion of LPs from Europe. Eighty-five per cent of the fund came from repeat investors and 15% from new investors – a lot of those were European.”
The private equity and venture capital funds will be invested by Summit’s team of 60 investment professionals throughout its Boston, Palo Alto, and London offices. By combining its equity and subordinated debt funds, Summit Partners can invest in excess of $500m per company.
The new funds will be used to acquire minority or majority positions in companies across a broad range of emerging growth industries, including technology, healthcare, business and financial services, and consumer and industrial products. Entrepreneurs and management teams will use the capital to finance growth, shareholder liquidity, recapitalizations, and management buyouts.
Formed in 1984, Summit Partners has provided growth equity, recapitalization, and leveraged buyout financing to 270 companies, which have completed more than 100 public offerings and in excess of 100 strategic mergers or sales. Since its inception, Summit has raised 12 private funds: seven private equity funds, two venture capital funds, and three subordinated debt funds with combined capital of nearly $9bn.