Vector Capital is a San Francisco, Calif.-based tech-focused private equity and debt investor which has funneled over $3 billion in companies through buyouts, recapitalizations, corporate divestitures, credit securities and restructurings, and minority investments.
The 20-year-old firm was created after spinning off from family investment firm Ziff Brothers Investments in 1997. Vector Capital now manages over $3.4 billion in equity capital from a variety of investors. As one of the first private equity firms to focus exclusively on the technology sector, some of Vector’s notable deals include Corel, LANDesk, Register.com, SafeNet, Technicolor, Teletrac, WatchGuard and WinZip.
The Silicon Valley firm has announced plans to seek our more complex tech deals as it focuses on more junior tranches of debt and “leaves safe, secured debt to banks.” Instead of “chasing the next Uber or Snapchat,” Vector is planning to dig deeper into troubled spots in the tech sector, where hidden value is amassing.
With its newly closed $1.4 billion V LP fund and $1.7 billion in total available capital, Vector is planning to participate across a company’s capital structure. The private equity shop sees value-add opportunities in the public market, where companies are “frustrated with the burden of being listed,” and large corporations are trimming down non-core operations. At the same time, Vector highlights other tech players who are struggling after adopting aggressive accounting practices and in desperate need of help.
As a value-oriented tech investor, Vector’s Founder and Chief Investment Officer Alex Slusky says the company will continue to pay a fair price and avoid bidding up asset prices in auctions. Vector will target new deals in the software, internet services, digital media, communications and industrial technology sector.
The firm attributes its success to its value-oriented approach, highlighting its two take-privates of Corel in 2006 and 2010. The turnaround opportunity which presented itself after the dot-com bubble has returned over $300 million to Vector in the form of dividends.
