Silver Lake eyes first close on bulk of Fund V in March

Silver Lake’s latest fundraise is off to a hot start and may hold a first close as early as March. Three limited partners told Buyouts they expect the fund to be heavily oversubscribed.

“They think their first close at the end of March is going to be $12 billion,” one LP said.

Two additional LP sources indicated they expect Silver Lake Partners V to raise most of its total capital in the first close. One of them said the firm could eventually raise as much as $15 billion.

Whether Silver Lake has set a hard cap is unclear. Bloomberg reported the firm had set a $12.5 billion target in December. Silver Lake declined comment.

The firm officially launched the fund late last year, Buyouts reported. At the time, one LP said the eventual size of Silver Lake Partners V was “an open question. It sounds like they’re not boxing themselves in.”

Silver Lake’s previous fund, a 2013 vintage, also saw strong demand. The firm initially launched its fourth fund with a $7.5 billion target and eventually held a final close on $10.3 billion.

Fund IV was netting a 30.5 percent internal rate of return and 1.3x multiple as of June 30, California Public Employees’ Retirement System documents show. Fund III, a 2007 vintage that closed on $9.3 billion, had netted a 17.9 percent IRR and 1.7x multiple as of that date.

Silver Lake’s flagship funds invest in technology, tech-related and growth companies. The portfolio includes stakes in Alibaba and Ancestry.com. The firm took Dell private with founder Michael Dell for $24.9 billion in 2013.

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Jim Davidson, co-founder and chairman of Silver Lake, speaks at a panel discussion at the Milken Institute Global Conference in Beverly Hills, California, on April 28, 2009. Photo courtesy Reuters/Fred Prouser