Tech-focused Francisco Partners gears up for big fundraising

The firm, with offices in San Francisco, London and New York, will also be bringing its second Agility fund to market.

Francisco Partners, which has been under a harsh spotlight recently for its past investment in cyberweapons business NSO Group, is preparing for its biggest fundraising yet, sources told Buyouts

Francisco Partners Fund VI will likely target more than $5 billion, and potentially $5.5 billion, one of the sources said. It’s not clear if a final target has yet been set. 

The firm, with offices in San Francisco, London and New York, will also be bringing its second Agility fund to market, with a likely target of $1 billion, sources said. 

The funds could officially hit the market in the second quarter, sources said.

The fundraising, if successful, would represent a big jump in Francisco’s fund sizes. The firm closed its prior flagship pool, Fund V, on $3.9 billion in 2017. It’s first Agility fund, which invests in smaller companies than the main fund, closed on $600 million in 2016. 

Fund V was generating a 10.9 percent internal rate of return and a 1.06x total value to paid-in multiple as of June 30, 2019, according to performance information from the Florida State Board of Administration. Fund IV was producing a 27.4 percent IRR and 1.87x multiple as of the same date, according to Florida’s records. 

The firm’s third fund, which closed on $2 billion in 2011, was generating a 21.2 percent IRR and a 2.48x multiple as of the same date, Florida said. 

Francisco’s Agility fund was producing a whopping 124.93 percent internal rate of return since inception as of March 31, 2019, according to performance information from California State Teachers’ Retirement System. 

Francisco was formed in 1999 by five partners: Dipanjan Deb, Benjamin Ball, Sanford Robertson, David Stanton and Neil Garfinkel. Francisco is led by Deb, chief executive officer, along with co-Presidents Ezra Perlman and Deep Shah, and Chief Investment Officer David Golob. 

The firm in 2014 acquired NSO Group, an Israeli maker of spyware that came under fire for working with authoritarian governments. NSO founders, along with Novalpina Capital, bought back a majority stake in the company from Francisco Partners last year at a valuation of just under $1 billion, New York Times reported.

In December, Francisco agreed to buy workplace connectivity software business LogMeIn alongside Evergreen Coast Capital for $4.3 billion.

Action Item: Check out Francisco’s Form ADV here: https://bit.ly/2Rpka8A