Thoma Bravo Raises $1.25B In Five Months

What a difference a few years make. Chicago buyout shop Thoma Bravo announced on Feb. 28 that its 10th fund came in at $1.25 billion and was substantially oversubscribed. The firm did not disclose investors for Fund X, although Thoma Bravo did add a sovereign wealth fund to the mix, Carl Thoma, a managing partner, told sister Web site peHub.

The firm spent roughly five months officially marketing for Thoma Bravo Fund X, less than half the time it spent on its ninth fund. Marketing for Fund X started after Labor Day with a $950 million target. PeHub reported in October that Thoma Bravo was receiving so much interest that Fund X would likely come in at $1.2 billion. Thoma Bravo Fund X LP actually closed at $1.25 billion, because some general partners ended up putting in more money, Thoma said.

“In all humility, this was our easiest time raising money,” Thoma said. “But I owe that to my partners and all of our portfolio companies that allowed us to put up strong returns for our LPs.”

The firm did not use a placement agent for the fund.

Thoma Bravo had a more difficult time fundraising for its ninth fund. The firm spent 12 months marketing for Fund IX, which initially had a $1 billion target. Thoma Bravo ended up reducing that target to $822.5 billion, which closed in 2009. Fund IX has an ROI of 45 percent, which Thoma says isn’t as relevant as the 20 percent returns generated by each of the firm’s previous funds.

One trend that benefited Fund X? Mega funds are currently out of favor with pension funds and endowments, Thoma said. These large LPs are pulling their money out of the mega funds and putting it into the mid-market, he said. “The fund could’ve been twice as big,” Thoma said. “We agreed to cap it at this size.”

Despite all this good news, Thoma said he is “peeved” at the private equity industry, which has allowed itself to be portrayed as “greedy people.”

Thoma, 63, said he has a different attitude than some at The Blackstone Group or The Carlyle Group. Thoma helped co-found Golder Thoma & Co., which became known as Golder, Thoma, Cressey, Rauner in the 1980s. The firm spawned GTCR , Cressey & Co. and the current Thoma Bravo. Thoma is also the former chairman and president of the NVCA.

“Somewhere along the way, the PE industry lost its way,” he said. “Our industry is about moving capital and supporting companies so they can grow and create jobs. Nothing more, nothing less. … Somewhere along the way it got to be about ‘private equity is about people getting rich.’”

“I didn’t get into this business to get rich.”

(Luisa Beltran is a senior writer for peHub.)