By Laura Kreutzer
Of DOW JONES LBO WIRE
Silver Lake Partners, the technology-focused firm that sold
Skype to Microsoft Corp. (MSFT) last year, is seeking $8 billion to
$9 billion for its newest large buyout fund, according to two
prospective investors.
The Cupertino, Calif., firm aims to hold a first closing for the
fund in June, these prospective limited partners said.
A $9 billion goal would put the Silver Lake Partners IV LP
roughly in line with the $9.3 billion the firm raised for Silver
Lake Partners III LP and comes at a time of intense competition for
investor dollars as more large buyout shops look to raise fresh
capital.
Silver Lake will be able to point to solid performance from its
third fund as it hits the marketing trail. As of Sept. 30, Fund III
was generating a 19.5% net internal rate of return, according to
performance data published by the Washington State Investment
Board, which committed $250 million to the fund.
Meanwhile, Silver Lake Partners II LP, a $3.6 pool raised in
2004, was generating a 9.73% net IRR as of the same date, according
to the Washington State Investment Board data. Although the pension
system didn't back the firm's debut fund, separate performance data
published by the California Public Employees' Retirement System
shows Silver Lake Partners I LP produced a 25.5% net IRR as of June
30.
One of the firm's backers said the fund raising isn't
necessarily a slam dunk, given the constraints many limited
partners face these days.
"I don't see a lot of LPs going back to funds with a larger
commitment than the prior fund," this investor said, adding he
believes Silver Lake will need "to pick up some new LPs."
Silver Lake Partners targets investments in large technology
companies and has backed businesses such as semiconductor company
Avago Technologies Ltd. (AVGO), travel-services company Sabre
Holdings Inc. and memory-storage company Smart Storage Systems Inc.
as well as social commerce companies Groupon Inc. (GRPN) and Zynga
Inc. (ZNGA).
Last year, the firm teamed up with Kohlberg Kravis Roberts &
Co. and Technology Crossover Ventures to invest in The GoDaddy
Group Inc., a Scottsdale, Ariz., Internet-domain-registration
group.
Silver Lake declined to comment.
(Dow Jones LBO Wire covers buyout and growth equity deals, as
well as private-equity fund-raising and other news of interest to
the private-equity community.)
-By Laura Kreutzer, Dow Jones Private Equity Analyst;
978-621-5708; laura.kreutzer@dowjones.com