Thoughts on Thoma Bravo, TPG Tech, KKR TMT, Silver Lake, other tech PE funds
Thoughts on Thoma Bravo, TPG Tech (buyout platform not growth), Silver Lake, Welsh Carson, KKR TMT, Vista, H&F, and other MF/UMM tech PE funds? Incoming analyst thinking about tech pe at these firms and others. thoughts on culture, associate experience, info on investment style, and interview would be helpful, especially for Thoma Bravo and TPG tech team.
All top shops, obviously. I would put Vista/SL/Thoma on a tier above the others for tech though
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NGT is a glorified sourcing shop. Not even one of the top growth equity firms either, as discussed in one of the other threads
Disclaimer - info may be a bit dated (as it's been a few years since I've had recruiting conversations with these groups)
TPG's tech investing efforts are mostly run out of Capital, with the exception of MM buyouts. Growth equity investments, while invested out of the Growth fund, are often sourced and reviewed by the Capital team. TPG has a mixed reputation on the street though - I've heard many regard them as a bit undisciplined, and some of the valuations that they underwrite (especially on growth deals) are a bit irresponsible (including ones they've done recently). Not sure about their culture.
Silver Lake has strayed from its roots - away from pure technology buyouts/control deals and more into growth equity transactions and the broader TMT space. Still an incredibly smart group of people though. They work hard but generally have a reputation for paying well and maintaining a good culture. Also one of the few PE firms out there that will promote internally all the way to the top. Not sure how performance looks nowadays though.
KKR NGT is a sourcing shop in my view. Not particularly strong, not weak, interested in the TCV/Summit/TA approach of cold calling and finding profitable "high-growth" software companies to invest in. With regards to their core PE platform - I don't recall any tech deals they've done recently.
Advent is someone you should add to your list. They just hired one of the former heads of TPG's tech team to lead their new technology investment efforts (minority and control) - they seem very focused on building out their TMT business and could be an exciting place to go.
I tend to lump Vista and Thoma together. Software-focused obviously, willing to pay premium multiples for premium businesses. I've heard mixed things about bureaucracy and culture at Vista (mostly skewing negative), but you can't argue with their historical returns. I'd be skeptical that their returns will remain strong moving forward, as they're raising massive funds and investing at extremely rich multiples.
No thoughts on the other funds you've listed.
I also haven't seen a lot of technology buyouts recently, probably due to the expensive nature of the space. A lot of these firms have moved toward minority stakes as it's easier to raise and deploy capital in growth-stage companies at the moment. To be honest however, I generally do not follow the tech LBO space so I'd love to hear any opinions to the contrary.
Yea just to add to this, I think the absolute dominance of Vista/Thoma should not be understated. Folks should realize these two are raising 14-16bn funds each for software PE only. Think about that vs a KKR who raised idk ~14bn for us PE all sectors. I.e. thoma/vista together have been like half of the enterprise software buyout market in the last few years. Thoma/Vista known to be cost cutters and heavy on management changes. Creates an angle for folks to pitch themselves as "friendlier" but at the end of the day, the ability to pay up is tough to beat.
Would add Permira to the above list as a top player (menlo office).
This is my segmentation of the landscape:
(1) Pure-play large-cap tech LBO funds: Vista, Thoma, Silver Lake • Vista and Thoma are more growth-y, pure software-focused, mostly majority recap firms and essentially pioneered SaaS LBOs. Silver Lake has a much wider mandate in terms of industry (e.g. Endeavor the talent agency and sports clubs, which Vista and Thoma are unlikely to touch) and structure (lots of minority growth rounds e.g. recently COVID-related PIPEs/minority rounds in Expedia, Twitter, Airbnb). • Vista and Thoma have a shorter track record but exceptional returns. Silver Lake has a longer track record and really strong returns (still) but returns have been lower than the Vista/Thoma SaaS train recently. • (since OP asked) Thoma is very focused on B2B enterprise software, with a $1-2bn TEV sweetspot so there is some room for growth in their companies. Subfocus is on complex bac-end – niche security, application and infrastructure systems that other PE firms may not understand. Regarding process, they’ve launched the on-cycle for 2 years so extremely competitive.
(2) Generalist large-cap LBO funds with large tech focus: H&F, Advent, Warburg Pincus, Permira (and to a lesser extent, TPG, Bain Cap, EQT, Apax etc.) • You'll find H&F, Advent and Permira in many of the auctions with Vista/Thoma. • TPG’s Collabnet acquisition was very Thoma-like so they may do more tech LBOs but for now, haven’t seen them do as many.
(3) Pure-play large-cap tech growth equity funds: Insight, General Atlantic, TA Associates, Summit, KKR NGT, Blackstone/Providence/TPG "Growth", Bain Cap/Advent/Permira/Apax/CVC "Tech Opps" (separate funds from LBO arm) (and Warburg because they do a lot of growth equity from their man fund)
(4) Pure-play mid-cap tech LBO funds: Francisco, Marlin, Siris, Hg, Clearlake etc. (this is a long list..)
(5) Generalist mid-cap LBO funds with large tech focus: Welsh Carson (since OP mentioned: primarily healthcare focused; technology is secondary), Veritas, Genstar, New Mountain etc. (this is a long list..)