Kevin Dowd March 18, 2016
Vista Equity Partners has held an initial close on its sixth flagship fund and set a hard cap of $10 billion, according to reports. If that target is reached, it would be the firm’s largest fundraising by far, easily exceeding its $5.8 billion Fund V, which closed in 2014.
Considering that previous fund’s early performance, there’s little reason to doubt Vista’s ability to put all that capital to good use. Among 2014 vintage buyouts funds of between $5 billion and $10 billion, Vista’s Fund V has the highest IRR, at 8.71% as of December 31, according to the PitchBook Platform.
Like all Vista vehicles, the firm’s Fund V has been put to work investing in tech companies, including a $4.3 billion buyout of TIBCO Software and a $6.5 billion take-private acquisition of risk-management business Solera completed earlier this month. Already, some large exits are in the pipeline, too: Vista has agreed to sell payment processing provider TransFirst to TSYS for $2.35 billion, fewer than 18 months after acquiring the company for $1.5 billion. It’s of course early in the fund’s lifespan, but the initial evidence holds promise.
Going further into the Vista archives reveals more impressive results. Vista Partners Fund IV, a $3.5 billion vehicle closed in 2012, has an IRR of 21.42% as of the end of last year. The firm’s two previous funds have also generated top-quartile returns. Its $1.3 billion Fund III (closed in 2008) boasts a lofty 28.8% IRR, while the $1 billion Vista Equity Fund II logged a 29.2% IRR and a staggering 2.73x DPI.
Investors in the firm’s newest vehicle are surely hoping Vista can keep it up. Here are some other recent funds from notable tech-focused PE firms: