Thoma Bravo raised $24.3bn fund (!!!!)
WTF in this environment when everybody is downsizing how did they raise peak 2021-2022 numbers???????
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Because allocators still won't get fired for allocating to name brand funds. It ain't going to end well lol.
Because TB got thicc balls and allocators achieve alpha big boy status for writing them more cheques.
Wait till they get a load of that 2021 vintage...
tb has good returns at scale and actually has a differentiated platform / strategy
not sure why the hate
It's a flat fund by a top pure-play MF with proven scale and tech isn't nearly as toxic as in 2022. Impressive but hardly "WTF."
Whole lot of LPs don’t believe the “software is dead” thesis
Solid and consistent track record, excellent brand, stable management and team, focussed strategy on a traditionally high performing part of the market (well positioned for AI tailwinds), ability to absorb large tickets from institutions without being an outsized % of the fund(s).
Combination of these and more make it a non-controversial underwrite for most LPs and a solid investment.
Solid and consistent track record up until '21 / '22 where they got a little ZIRP crazy and made several missteps (both in terms of PE investments and new strategies). Jury is still out on whether AI is a tailwind or headwind (or both) for software PE, which is a separate discussion. I do agree w/ your other points - in addition to the normal who's who of North American institutional relationships, they have tremendous connections w/ LPs in the Middle East.
IR team is also the leanest in the industry - crazy stuff
This is because TB doesn't need an IR team to raise money. Orlando is the Head of IR and does more than he needs to in raising these flagship funds himself.
Once you get to a certain scale, these funds should and do raise themselves. Even if they underperform, like another comment flagged, no LP is getting fired for investing in TB Fund XVI.
Thoma Bravo is the best in the business and their returns have been excellent. They have a real strategy to build businesses that grow profitably - not just generate returns through leverage and multiple expansion like 90% of sponsors. As a result, they’ve been generating DPI when nobody else has.
If you think about how they’re positioned relative to the rest of the private equity industry, Thoma Bravo being able to raise money like this is one of the least surprising headlines you’ll see.
What’s the strategy? I keep hearing this but no one says what it is
That’s because we could tell you, but we’d have to kill you
Outsource cost centers to 3rd world and sell in rising-multiple bull market.
They are really good at buying negative / low margin software businesses and selling them at 40% margins.
Buy on an ARR multiple and sell on an ebitda multiple. It’s not rocket science, but they do seem better than most competitors at identifying where the cost can come out and prices go up to do that
This, don’t work there, but have worked with them a few times on long stuff.
Awesome group of people who do things the right way
Chicago is back baby!!!!
/s
TB doesn't have meaningful IP prescense in Chicago... TB is by far best-in-class at SW PE
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