Silver Lake's Mid-Market Arm Pulls in Over $1B
The former Shah Capital Partners team has closed its debut fund under the Silver Lake umbrella.
May 6, 2008
Silver Lake has wrapped up its debut mid-market private equity fund, which, like the larger vehicle, is a tech-focused fund.
Silver Lake Sumeru, which raised $1.1 billion, will invest in middle-market technology, hardware and Internet companies. Silver Lake has until recently been engaged in far larger buyouts, such as the $8.3 billion take-private of Avaya. The latest fund from the firm, however, reflects a desire to gain exposure to the middle market.
The genesis of the fund goes back to Silver Lake's December 2006 subsumption of Shah Capital, led by founder Ajay Shah. Shah Capital had scored a number of big wins prior to joining Silver Lake, and was an investor in such companies as Magellan and semiconductor test-equipment company NPTest. Shah was also a co-founder of Smart Modular Technologies, a company he took public in 2005 and later re-acquired alongside TPG Capital and Francisco Partners. His move to Silver Lake, meanhwhile, helped him take advantage of the firm's established name in the market.
“Silver Lake has gained a well-deserved reputation as the partner of choice among the world’s leading technology management teams,” Shah said in a statement. “Sumeru is now able to build on that reputation as we look for opportunities to assist attractive middle-market technology companies undergoing the transformation required to reach the next level of growth and profitability.”
The fund provided financing to support the merger of Audio Visual Innovations and Signal Perfection, providers video and audio conferencing. Sumeru also already agreed to a deal with ChoicePoint, an identification service, to buy the company’s i2 service, which provides analysis and visualization software for government agencies.
The fund is just a fraction of the size of Silver Lake's $9.3 billion flagship fund. Investors in both Silver Lake's fund and the Sumeru fund are comprised of public and corporate pensions, endowments, foundations and other individuals.
Back in January, Silver Lake let the California Public Employees’ Retirement System (CalPERS) take a nearly 10% stake in the overall firm for an undisclosed sum. The firm has also bolstered its staff in recent months. John Brennan joined the Sumeru fund as managing director from Adobe Systems. He previously put in stints with Hewlett Packard, Accenture and Brown Brothers Harriman. Silver Lake also recruited former Sony Ericsson executive Miles Flint as senior adviser and poached Charles Giancarlo from Cisco, where he served as the company's development head.
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