Thoma Bravo’s spectacular $22.8bn tech-fueled fundraise

As is the case with a number of other leading private equity firms this year, Thoma Bravo is on a fundraising spree like no other. The $70 billion-plus firm announced the closure this week of the Thoma Bravo Fund XIV totaling $17.8 billion and the $3.9 billion closing of the Discover Fund III and the $1.1 billion close of the Explore Fund. All three represents a different slice of the software and technology-enabled services sectors that Thoma Bravo focuses on, and each fund was significantly oversubscribed. The funds follow an active year for Thoma Bravo on both the buy and sell side, with investments and realizations representing over $20 billion in combined enterprise value, including the $11 billion sale of Ellie Mae to Intercontinental Exchange. Thoma Bravo Fund XIV has targeted large equity investments and is the largest flagship fund in the firm's history, while Thoma Bravo Discover Fund III is expected to make middle-market equity investments and Thoma Bravo Explore Fund is expected to make lower middle-market equity investments. All three funds received strong support from Thoma Bravo's network of investors including sovereign wealth funds, public pension funds, multinational corporations, insurance companies, fund-of-funds, endowments, foundations and family offices Investors recently tracked by Alternatives Watch include: The Virginia Retirement System ($150 million to Thoma Bravo XIV; Washington State Investment Board ($200 million to Thoma Bravo XIV); Merced County Employees’ Retirement Association ($8 million to Thoma Bravo Discover Fund III); Pennsylvania State Employees’ Retirement System ($50 million to Thoma Bravo XIV and $25 million to Thoma Bravo Discover Fund III; and Minnesota State Board of Investment ($150 million to Thoma Bravo XIV). “We are grateful to our investors for their tremendous support and their continued confidence in our investment strategy,” said Orlando Bravo, founder and managing partner at Thoma Bravo. “Over the last 20 years, and over the course of more than 260 transactions, we’ve seen firsthand how well software can perform with the right investment and operational guidance.” The firm has acquired more than 260 software companies across a range of industries, including healthcare IT, security, financial technology, infrastructure and applications. Today, the firm's private equity software portfolio includes over 40 companies that generate approximately $15 billion of annual revenue and employ over 45,000 staff around the world. An example of one of the firm’s investments is the completion of Thoma Bravo’s acquisition last month of Foundation Software, a provider of construction accounting software and payroll services to specialty contractors. The transaction amount was not disclosed, but Foundation Software is expected to leverage Thoma Bravo’s capital and expertise in software solutions to continue growth and to pursue further innovation across the company’s platform. "The accelerated digital transformation across all industries has underscored how essential software is for commerce and business continuity as well as its continued resilience," said Jennifer James, managing director, head of investor relations and marketing at Thoma Bravo. "Our investors recognize that our deep experience and track record in enterprise software have positioned us to take advantage of these industry dynamics and the opportunities in the market. As stewards of their capital, we greatly appreciate their support and look forward to applying our software expertise with a goal of continuing to drive successful outcomes for our investors."

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