TA Associates still bills itself as a middle-market private equity firm, but it now has enough money to sit at the big kids’ table.
The Boston-based firm last month closed on $3.5 billion for its tenth general fund, plus $777.5 million for its second subordinated debt fund. The $3.5 billion was raised entirely from U.S.-based limited partners, and will be invested alongside an $800 million co-investment fund raised in 2004 from foreign LPs. TA began using the bifurcated fund structure in the early 1980s due to now-antiquated tax laws, with the only remaining distinction being that it sometimes provides domestic LPs with securities distributions from public portfolio companies, while it liquidates such securities for foreign investors and then distributes cash.
TA’s prior general fund was $2 billion, plus a $500 million co-investment fund.
Brian Conway, a managing director with TA, said that the extra capital might provide a bit of extra deal-size flexibility, but that its overall strategy remains unchanged. That means average equity investments of $80 million into profitable growth companies within the technology, financial services, business services, healthcare and consumer markets. It also means that TA will continue to source deals via its trademark cold-calling strategy, which has netted such big fish as last year’s $300 million investment in MetroPCS (part of a $728 million deal co-led by Madison Dearborn).
In related news, firm CEO Kevin Landry and senior managing director Andrews McLane will continue to transition into part-time roles, in keeping with a previously-disclosed succession strategy. It will continue to staff up at the vice president level. —D.P.