State of Large-Cap Tech PE
Pretty much the title - very curious to hear opinions/thoughts/considerations on the state of the biggest tech buyout shops going forward. In my view, Thoma Bravo, Silver Lake, Vista, H&F, and can probably throw Francisco and Warburg in there as well.
Thoma: top shop for now - curious to hear what will happen to the $50B deployed in 2021 …. are they screwed?
Silver Lake: Honestly, haven’t heard a peep about them on the news since raising the $20B fund in mid-2024; have only heard about subpar culture, analyst program cut, and don’t believe any deals have been done recently
Vista: In combo with WSO’s general sentiment, continuous bad press post-2021. Major loss on Pluralsight, took 2+ years to raise $20B flagship fund when Thoma raised $32B across all 3 funds in ~8 months. Unlike Silver Lake, they have done a plethora of deals with the new fund, but more concerned about the firm’s future performance / reputation given lack of DPI and potential subpar returns after Sheth’s departure - would love forum’s thoughts on Vista’s attractiveness now, 2, 5, or even 10+ years from now at this rate.
H&F: One of the most intellectual PE shops on the street - arguably the top offer here any incoming associate should take. Absolutely brutal culture given high standards and “2 and out” except 1-2 invites per class to come back after Business School. Raised a $24B latest fund, and have been consistently deploying - no concerns about firm performance here, mainly about career viability for any incoming / current associates.
Francisco: Strong up-and-coming player in the pure tech buyout space, reminiscent of Vista/TB’s growth phase. Still mainly a UMM/MM focused fund given fund size of ~14B, but certainly an emerging leader in the space - would love to hear forum’s thoughts, relatively limited information on FP on WSO
Warburg: old-school private equity firm; very “traditional” approach to both investing (mainly growth equity oriented rather than buyouts, very slow fundraising cycle) and culture (very supporting of B-School at H/S/W after associate years). Tech groups broken out into Technology and “Strategic Investments Group” (SIG) - not very well versed in their performance either.
H&F performance is very challenged right now. Fundraising will not be easy I suspect.
Any color on the pure software buyout players? Mainly Thoma vs Vista - concerned about Thoma’s intense amount of capital deployed in 2021, and Vista overall after 2021 (the Pluralsight deal was announced Dec 2020, and Sheth left Nov 2020 - could be rough sledding for the firm since then)
H&F missed their latest fundraise target. It has to mean something
they have large cap!!!!
so think tooth paste 
go dry cap too big expose air!!!!!!!
How did H&F miss target - $24B is their largest fundraise ever? Or was their target much higher than that - not sure if it’s a valid argument if they were targeting $30B and got $24B. Plenty of PE firms at that time closed well below a $20B target
latest flagship raise was 22b (with a separate 2b for a separate secondaries raise), which was smaller than the previous flagship raise of 24b.
believe as part of their overall restructure, WP may just have one tech group now
curious to hear thoughts on how the latter two in the original post (FP / WP) have fared
Bump
bump for vista
Any thoughts on Hg?
Stellar returns- UMM / MF at this point.
how is vista faring relative to the other names?
Guys if the convo is going to be about tech-only shops instead of tech groups literally just go on pitchbook or preqin for the returns or do some induction based on fundraising. You're not going to get a lot here beside the usual "yo some of their 2021 names have terrible marks" which...duh.
bump on software players - looking to break in for ASO
BUMP. Very interested in the names above for ASO recruiting
Worked in large-cap tech PE for a while. Here are some thoughts:
Silver Lake is always judicious before investing and has historically not deployed at a high clip (which is definitely not a bad thing).
TB and Vista definitely will have bad performance because of 2021, and yes TB is definitely going to be fairing slightly worse than Vista in these regards given how much they deployed, but I don't think it's bad for TB given that they were able to raise $24B in '22.
Yes, sentiment is bad for Vista on WSO and in the press, but honestly, I don't think it's super warranted. Everyone in tech PE did badly in 2021, and many reputable MFs have had 0s (even recently lol), so one investment going to 0 is probably not the end of the world (on CALPERS you can even see that the Pluralsight vintage isn't even that bad given the 0, and the macro environment of the fund's timeframe).
Also, generally speaking, these upcoming vintages for SL (2024), TB (2022), and Vista (2023) are going to be really good. I know people at all of these firms and given how low tech valuations were when the first couple of closes happened, performance is really, really good for these funds. I really expect these firms to bounce back in a strong way if they're able to close out these vintages with this level of performance.
Took Vista nearly 3 years to pull out a barely $20B fund … not to mention their other two strategies also going through a “marathon” fundraise … can’t imagine future is bright there for incoming Associates
Was only referencing Vista's large-cap fund. Other funds are fairing far worse and struggling to fundraise, but this doesn't matter for incoming associates as Vista's associate program is now fund-specific (obviously unless you're going to one of the other two funds, but I thought this discussion was regarding large-cap tech PE).
Also insane that people are saying "barely $20B fund" - a pretty monster fund given just tech, bad fundraising environment for tech PE, and being convicted in one of the largest ever tax fraud cases. Don't see the long fundraising being a LT issue given the situational nature of the fundraising and if the latest fund performs well (which it probably should given the favorable state of valuations in tech right now). Also, stuff like this doesn't matter for associates (not just Vista but any MF that's going through a rough patch) unless you plan on staying LT (which is honestly going to be like 1-2 people max).
What do you do now? Why did you leave?
Bump on vista and tb - recently signed at one of the two shops
Which of Vista / Thoma’s funds are worth recruiting for? Worth it for the name brand regardless (for exit opps, b school placement, etc.?)
For both TB and Vista, you want to be in their flagship fund and it's not even close. This is the "MF" part of these firms, not the other funds. Naturally, better exit opps, b school placement, and I'm sure even compensation to a degree will follow. As of this past cycle associates at Vista are put into a fund, which is a new development. Heard from people at the firm. Also, some IB analyst friends who were recruiting for Vista had to rank which fund they wanted to recruit for their associate gig. TB has always been fund-specific at the associate level.
And if you don’t get placed into your #1 fund? Just by pure numbers, not everyone will receive their first-ranked request.
If you joined Vista/FP as a “fund generalist” - and then get essentially randomly placed into a fund (~4-5 months of data/teamwork isn’t sufficient for it to be anything but random), I assume you can exit based on the Vista/FP brand name. Perhaps in the long term this will change though, if these funds silo immediately like at TB.
Not sure if I entirely agree with the exit opps / bschool (for now, at least). Headhunters and AdComs will evaluate Vista/FP based on the brand name, and frankly getting the job is the hardest part. Again, that is my thoughts in the short term. Once they recruit fund specifically, things could change. Curious to hear anyone else’s thoughts.
bump on fund placement
Is Thoma’s associate program fund specific? How does recruiting for it work? Do you recruit specifically into a fund through HHs etc or do you first get a general Thoma offer and then get placed into a specific fund? What about Francisco Partners?
Bump on this for Thoma Vista and FP - no clue
FP and vista both recruit one pool and associate work across mid-cap and large-cap funds. Think vista starts separating people out at the fund level when people hit senior associate, whereas don’t think FP does. No idea on Tb
You work on both as a FP associate / are generalist. Not sure how people here claim to have offers at both, and do not know this given this was mentioned various times in the interview process and their info sessions.
Curious to hear thoughts on which firm is better positioned in the long term (so relevant for the VP/Principal+) - Vista, Thoma, FP, Silver Lake, H&F? Feel like once these 2021 vintages come to light, we can predict short term, but thinking more broadly here.
bumping, signed with one of the 5 and interested in people’s thoughts
Bump - same here
These are all momentum strategies. Tech did phenomenally well from 2010 to 2021, then imploded. In more prudent hands that wouldn’t be an issue since they’d be well diversified across vintage years, but in reality they were drunken momentum sailors and — as OP noted, TB put $50bn to work at silly multiples with a greater fools thesis on exits.
To be fair, all of that can be fixed overnight if rates go back to zero and multiples explode back up. But not sure how that happens when DJT policies going to inflate the living shit out of the economy.
@Principal in PE - LBOs - what is your perspective on any of the juniors above discussing Vista/TB/FP, specifically regarding exit opportunities with the random fund placement and such? How would you view as a prospective recruiter / interviewer for your fund?
Not sure what you’re asking.
Exit options for juniors from any of those firms would likely be A+. Haven’t seen much historically since historically they were the promise land, no one would leave, and those aren’t big 2-and-out then to b-school shops.
How are Permira and TPG?
Bump
Given the potential for Gen AI to completely disrupt the software space, I think any of these firms is high risk from a career standpoint.
You cannot tell me Dayforce is going to do well unless the AI bubble pops and we don’t get massive advancements in productivity saving (headcount cutting). But if the AI bubble pops we are probably going through a recession and credit cycle, which therefore would lead to immense challenges in any of these firms portfolio companies given high leverage and slow growth in what are now the “best of times”.
TB is going to rip cost out of dayforce at lightning speed (the same way they did with Jeppesen) in large part thanks to AI, not in spite of it. 3 years from now they’ll take it public again with margins twice as high and growth slightly below where it is today but who cares. 2x MoM and Orlando, Scott, and team will go get a table at Eleven and not think twice about it. Not that complicated
where are you reading about how TB is cost-cutting in Jeppesen? Not a surprise, but is there an article?
They will do well because of Gen AI not despite it. Think playbook for a lot of latest tech investments by PE is lower relative leverage, huge investments in AI products + cutting costs due to AI. I am in tech coverage in one of MS / GS and that seems to be a lot of the sponsor thesis that we see. Vista in particular is very big into releasing AI-related products and cutting costs rapidly as part of their playbook.
That’s certainly the bull case. The bear case is that there are way more AI native competitors, seat based pricing moves to outcome or usage based, and SaaS budget continues to get allocated to AI.
Software PE ain’t going anywhere of course, but I think growth (and esp from NDR) might be harder to come by.
Any thoughts on those MF not pure tech - BX tech, KKR tech, Partners Group tech?
If you only want to do tech buyout, the only place worth working is Thoma Bravo. Everyone else can’t compete. TB underwrites the highest margins the majority of the time. And they are pretty good at achieving those margins. If you don’t care about fund size then Hg, Genstar, Francisco are also good options. To be clear, these are also excellent jobs but TB is a step above in scale & size.
The other tech groups / firms mentioned are not that good. Silver Lake has many dogs in the portfolio. (Ego)n spent 5-7 years buying up a lot of questionable media assets. Some have worked well (TKO) but others not so well (Endeavor). Vista is known for buying garbage like 10 years ago. They just never sell their dogs and merge with other shit (OG continuation vehicle). Warburg Tech group is OK but also have some losers (buying stuff at 120 NRR and high mult that’s now sub 110 NRR). KKR is a little better but they do more interesting stuff on the Media / Telecom side than Tech/Software. H&F I know less about. Insight is a little suspect, recent fundraising tough & I don’t really meet ppl at Insight and think these guys are killers. You didn’t mention Advent but they seem to have a keen eye on buying true monopolies (CCCS, NIQ). These companies aren’t great IPO candidates b/c they don’t grow much anymore so entry price is very important.
You didn’t mention General Atlantic but they are probably the best in the world at Tech investing. Some of the tech stuff they do is buyout in the growth equity team. I personally wouldn’t work for the actual buyout team that’s run by the ex Silver Lake guy it seems more like a coinvestment platform alongside TB types. The tech group head left recently (maybe for being late on AI or for 2020 era deals) but GA is hands down the best growth equity firm in the world and if you are serious about tech a place w/ the flexibility to do both growth capital or buyouts is probably better than a pure buyout shop that’s not one of the first four I mentioned.
+1 as one of the Aso's in a MF Tech group
interesting point on Vista, wonder if they're cooked. if robert f smith just a big fraud man.
What people who don’t work at these platforms often miss about Vista is that everything they touch is seen as radioactive now. No sponsor wants to buy anything from them. They have such a long list of shitcos that they’re trying to save by taking margins up to 50%+ and marketing it as “high quality, profitable software” when everyone knows it’s a hallowed out, shell of a company that is on the precipice of having growth go from 15% to flat. People avoid Vista owned companies like the plague and it’s going to show up in returns very soon
Any idea on smaller names? Frankly more interested in middle market investing since think there is more future opportunity for alpha generating there. The names you mentioned are all MF's or larger UMM's. I am going to a MF for my PE program (am an An2 in IB right now), but increasingly interested in going down market since it seems like there is a bit more whitespace in the MM/LMM world based on people I spoke to investing in those sizes.
NIQ is a true monopoly?
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