Trive goes bigger with $2.5bn target for latest flagship fund

Trive Capital, a specialist in complex deals, is seeking to raise $2.5 billion for a fifth flagship buyout offering.

The target for Trive Capital Fund V, together with its $2.8 billion hard-cap, was recently disclosed by San Antonio Fire and Police Pension Fund. Campbell Lutyens is the placement agent.

Trive has already held a first closing and will hold a second later this year, San Antonio documents said. The vehicle is expected to be in the market through the first quarter of 2024.

Fund V comes roughly a year after the close of its predecessor. Its targeted size marks a significant step-up from prior flagships in the series, including Fund IV’s $1.6 billion raised.

This quick return to the market with a larger offering, once common among GPs, is seen less often in today’s slower fundraising environment. It could be that Trive is looking to take advantage of emerging dislocation opportunities – most of them spawned by historically high interest rates – for which its strategy appears suited.

Trive’s flagship control strategy is focused on complex situations “in which speed and certainty to close may be a priority,” according to the firm’s website. Opportunities include family-owned companies in transition, underperforming or operationally challenged businesses, carve-outs, out-of-favor but protected niches, and take-privates of undersized public entities.

Targets are North American mid-market companies with revenue of $40 million-$1.5 billion and features like differentiated and diversified products or services and sustainable market positions. The strategy is “sector-agnostic,” San Antonio documents said, though business services, industrials, aerospace and healthcare are favored.

Control investments range from $10 million to $250 million of equity or debt per platform. Fund V is expected to build a portfolio of 15 to 18 companies plus add-ons, San Antonio documents said.

Trive’s value creation playbook is geared to tackling managerial or operational challenges and other business complexities, San Antonio documents said, with the goal of more than doubling EBITDA.

Trive was founded in 2012 by managing partner Conner Searcy and partner Chris Zugaro. Before, they both worked at Insight Equity, Searcy as a partner and Zugaro as a principal. Two other partners, David Stinnett and Blake Bonner, also came from Insight, while partner Shravan Thadani was formerly with Sequel Holdings.

Recent deals include Veltris, a solutions developer in data and artificial intelligence, engineering R&D and digital product engineering. In March, Trive and BayLink Capital invested in the company’s formation through the combination of Wavelabs Technologies and West Agile Labs.

A few months earlier, Trive and Epic Partners invested in Pryor Learning, a corporate training, credentialing and educational content provider. Trive also backed Kittyhawk, a hot isostatic pressing services provider to a variety of industries.

Trive has a solid track record across its flagship series, according to San Antonio documents. The 2018-vintage Fund III is representative, earning a 1.9x net multiple and a 32 percent net IRR as of March 2023. The newer Fund IV was generating a 0.9x net multiple and a -7 percent net IRR.

The firm did not respond to a request for comment on this story.