TA preps next fundraise in quick time targeting up to $16bn

TA Associates, bucking the trend of slowing fundraising, is gearing up to raise its next flagship fund just over a year after closing its last pool on a record amount.

The quick turnaround is a reflection of the strong fundraising environment of the past few years, when strong performing GPs were able to deploy capital quickly and start raising new funds quicker than in the past.

However, sentiment has changed in the dislocated markets as limited partners slow commitment pacing and push back on GPs driving rapid fundraising cycles. Private equity fundraising slowed in the third quarter, according to Buyouts’ data, with some 252 buyout, growth, VC and other PE vehicles in North America securing $111 billion, down 20 percent from the second quarter.

TA, like other firms fundraising in quick time like Hellman & Friedman, could face resistance from “fatigued” LPs, according to a family office investor who has heard the firm’s pitch. Even with strong performance, LPs are considering cutting smaller checks in re-ups with their established managers.

“There’s fatigue because ‘Hey, you guys are back, we have a lot of NAV with you and we can only do so much,’” the family office LP said.

TA is gearing up to raise its 15th flagship fund, along with its third Select Opportunities fund, which combined could target up to $16 billion, sources said. The Select Opportunities Fund III is targeting $1.5 billion, one of the LP sources said. The firm’s Select Opportunities strategy is to re-invest into older portfolio companies the firm is exiting to retain a stake in the growing business.

The Boston firm is opening a data room on the funds, and is holding due diligence meetings over the next few months. It expects to hold a first close around the end of March, the LP said. A TA spokesperson declined to comment.

TA, which invests in growing companies across business services, consumer, financial services, healthcare and tech, closed its 14th flagship fund on $12.5 billion in summer 2021, along with its second Select Opportunities fund on $1.5 billion. The firm is led by CEO Ajit Nedungadi and chairman Brian Conway.

The firm targets investments from $100 million to $600 million in equity and $10 million to $50 million in subordinated debt that values businesses from $100 million to $3 billion, according to TA’s website.

TA and Insight Partners agreed in October to invest in Aptean, which provides enterprise resource planning and supply chain software. The firm was set to become lead shareholder in Aptean with the deal.