Tech-focused private equity investor Vector Capital has closed its fifth flagship fund on $1.4 billion, surpassing a $1.2 billion target. The capital will be used to complete an array of deal types spanning the software, media, communications and industrial technology sectors. Vector will target companies in North America, Europe and Israel with enterprise values ranging from $100 million to $2 billion.
The vehicle is Vector’s first in nearly a decade, serving as the follow-up to Vector Capital IV, which closed on $1.2 billion shortly before the full onset of the financial crisis in 2007.
One likely reason for the increase in size with the firm’s new fund? The strong performance of its predecessor. As of the end of 2Q 2016, Vector Capital IV had an IRR of 14.4%, ranking in
the second quartile of its peer benchmark, according to the PitchBook Platform. The vehicle’s TVPI, meanwhile, has been on a steady rise since 2012, rising from below 1x to a more-than-respectable 1.73x figure as of 2Q.
Rather than deploying its $1.2 billion on a few mega-deals, Vector chose to spread its funding around. In addition to several 10-figure deals, the firm also used its fourth fund to make a number of acquisitions valued between $100 million and $300 million, including investments in automation software provider Gerber Technology (sold last year to American Industrial Partners) and gas-detection business RAE Systems (exited to Honeywell in 2013).
Here’s a look at some of Vector Capital IV’s key fund metrics over time, taken straight from the PitchBook Platform:
PitchBook subscribers can learn plenty more about the Vector Capital, its past funds, management team and more right here.