TA Associates Nears $3B In Pledges For Fund XI

Firm: TA Associates Inc.

Fund: TA XI

Target: $3.5 billion

Hard Cap: $4 billion

Amount Raised: $2.83 billion

TA Associates Inc has secured roughly $2.83 billion in pledges for its latest fund, according to a regulatory filing in early May.

Although the filing doesn’t provide a target for the pool, peHUB, the sister Web site of Buyouts, reported in late March that the Boston-based firm was seeking $3.5 billion for TA XI. That figure is also reflected in a document from the Montana Board of Investments, which approved a $10 million pledge to the fund on April 7.

TA Associates wasn’t immediately available for comment.

The hard cap for TA XI is $4 billion, according to the Montana document, which provides a wealth of other details as well, including confirmation that the carried interest rate for the fund will be 20 percent, rather than 25 percent, as peHUB previously reported.

As for TA XI’s investment strategy, the fund is targeting equity investments ranging from $60 million to $350 million with an expected average deal size of about $90 million, according to the Montana document. The fund expects to invest in roughly 30 companies, starting in the second or third quarter of 2009, with the pace of deals anticipated to be 11 per year, the Montana document said.

TA Associates didn’t use a placement agent for the fundraising, and the firm’s commitment level is listed 4.875 percent of the total pledges, according to the Montana document, which also noted the expected geographic breakdown of the fund’s investments as 70 percent in the United States and 30 percent in Europe, India, and other emerging markets.

The target for TA XI is level with the amount raised for the firm’s predecessor pool, TA X, which held a single, final close on its $3.5 billion in pledges in March 2006. According to data provided by the California Public Employees’ Retirement System, TA X had an IRR of negative 13.1 percent, as of Sept. 30, 2008. CalPERS pledged $100 million to the fund.

The most recent announced deal for TA Associates is a $60 million minority investment in e-Rewards, a Dallas-based provider of online market research products and services. The firm disclosed its completion of that deal in October 2008.

TA Associates describes itself as “comfortable” in both minority or majority positions on its Web site, saying its ownership position has ranged from 15 percent to 90 percent in its investments. It targets the technology, financial services, health care, business services and consumer sectors, and is able to provide both equity and debt capital through a variety of investment vehicles, including separate subordinated debt funds.