Boston-based TA Associates has closed its eleventh fund with $4 billion, handily exceeding its original target of $3.5 billion. The firm began marketing the fund in January.
TA XI LP will be used for investments in the technology, financial services, business services, healthcare and consumer sectors, with equity investments ranging from $60 million to $350 million.
The predecessor fund, TA X, closed with $3.5 billion in 2006. According to performance data available from the California Public Employees’ Retirement System, TA X had posted a net IRR of negative 17.5 percent with an investment multiple of 0.80x as of Dec. 31, 2008.
To attract limited partners, TA Associates, known for its growth equity investments and small buyouts, cut the carried interest in Fund XI to 20 percent from 25 percent. Other LP-friendly terms include a management fee that averages 1.74 percent of commitments per year over the fund’s life; transaction and director fees that go 100 percent to a management fee offset; and a no-fault divorce clause.
Backers include City of Philadelphia Board of Pensions and Retirement; Fire and Police Pension Association of Colorado; Indiana State Teachers’ Retirement Fund; Los Angeles City Employees’ Retirement System; Los Angeles Fire and Police Pensions; Montana Board of Investments; Purdue University and San Francisco Employees’ Retirement System.
TA Associates did not use a placement agent for the fundraising. Goodwin Procter LLP provided legal counsel to TA Associates during the formation of the fund.
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