Thoma Bravo Targets $1.2B For Fund X

Firm: Thoma Bravo

Fund: Thoma Bravo Fund X LP

Target: $1.2 billion

Placement Agent: None

Thoma Bravo has received so much interest for Fund X that it will likely come in at $1.2 billion, a source told sister Web site peHub. It had previously been reported that the firm, which has offices in San Francisco and Chicago, was targeting $950 million for its tenth fund.

The firm began marketing for Thoma Bravo Fund X LP right after Labor Day, the person said. A first close is expected in December when Thoma Bravo will likely have commitments of over 50 percent of the $1.2 billion. A final close is seen in the first quarter, the source said.

Thoma Bravo is not using a placement agent.

Marketing for Fund X is much different from Thoma Bravo’s last fundraising effort. The firm spent 12 months marketing for its ninth fund, which initially had a $1 billion target. Thoma Bravo ended up reducing that target to $822.5 billion, which closed in 2009.

Fund IX was Thoma Bravo’s first pool after partners Bryan Cressey and Peter Ehrich split to form their own firm in late 2007. Cressey & Co., of Chicago, is a mid-market firm that invests in health care companies. Cressey typically invests from $10 million to $100 million equity per deal, according to the firm’s Web site. In contrast, Thoma Bravo targets software and services firms. Investments range from $50 million to $150 million equity per deal.

“People took a risk to back [Thoma Bravo] and it really worked,” the source said. Fund IX is believed to have produced a net IRR of about 50 percent for LPs, the person said.

It also helps that Thoma Bravo has scored several liquidity events. In 2011, the firm sold Flexera Software, Excelligence and Manatron. peHub estimated that Thoma Bravo has received about $250 million in dividend recaps from portfolio companies including Hyland Software, Entrust and Vision Solutions since December 2010.

Officials for Thoma Bravo declined comment.

(Luisa Beltran is a senior writer for peHub.)