Tech funds still generate massive demand from investors

Vista Equity Partners has raised the largest technology-focused PE fund in history.

The shop raised $16 billion in outside capital for its new fund, Vista Equity Partners Fund VII LP.

That figure exceeds the $15 billion raised by Silver Lake. It also surpasses the $12.6 billion raised by Thoma Bravo.

Vista intends to add its capital to the fund. In addition, it will own between 4 and 6% of the fund.

Vista Equity Taps into Booming Demand

Recently, Tech-focused buyout funds have been hot. According to Preqin, tech-focused private-equity funds hit $122.1 billion this year. This figure surpasses the $116 billion that funds raised in 2018. The amount of capital targeting the tech sector has pushed valuations up to very high levels. Some analysts fear that these rising valuations will become unsustainable.

However, Vista still finds these deals attractive. The new fund has already invested in several companies. Investments include low-code software company Quick Base and the buyout of a public software company MindBody for $1.9 billion.

Vista now manages more than $50 billion in the technology buyout space. The firm has one of the best track records in the private equity industry. That reputation has made it easier for the firm to convince LPs to invest.

Since its foundation in 2000, Vista has averaged more than 30% annual returns, according to a recent Wall Street Journal article.

The new fund is the second closed by Vista this year. Earlier in the year, the firm closed on an $850 million fund that is investing in fast-growing enterprise software firms.

For more news about funds and deal news, check here.