Vector Capital, a San Francisco-based private equity firm, has announced the restructuring of two of its funds, Vector Capital II, Vector Capital III, and affiliated vehicles held by existing limited partners, for approximately $450 million.
The tech-focused investor has agreed to restructure the funds with affiliates of Goldman Sachs as well as Singapore’s sovereign wealth fund GIC, according to a recent statement. Collectively, Goldman Sachs Asset Management’s Vintage Funds and GIC are now the largest LPs in the funds.
Vintage fund Vector Capital II LP closed in 1999, while Vector Capital III closed in 2005. Under the terms of the agreement, affiliated vehicles owned by existing limited partners in Vector Capital II and Vector Capital III are also being restructured. The transaction will provide the opportunity for the assets remaining under Vector’s control to pursue growth through add-on acquisitions and other strategies.
“We are pleased to be partnering with Goldman Sachs and GIC, who recognize the significant long-term value in Corel and WatchGuard, which comprise the vast majority of the remaining assets in Funds II and III,” stated Vector Capital Founder and Chief Investment Officer Alex Slusky. “Importantly, the transaction will provide these two companies and their management teams with the additional runway and committed capital to pursue strategic M&A opportunities and execute on their growth strategies. Moreover, this is a terrific outcome for our Fund II and III LPs, who are receiving a premium value that is meaningfully above the assets’ original cost basis.”
Vector Capital was founded in 1997 as a spin off of family investment firm Ziff Brothers Investments. The firm currently manages $3.5 billion in equity capital from investors including wealthy families, university endowments, foundations and financial institutions. Notable investments including Corel, WatchGuard, Register.com, SafeNet, Technicolor, WinZip and Teletrac. As one of the first private equity firms to focus exclusively on tech, Vector specializes in transformational investments in established technology businesses. In February 2017, Vector raised $1.4 billion for Vector Capital V.