Asides

Silver Lake’s Fundraising - Cheap Tech Targets?

By The Prince ⋅ March 4, 2008 ⋅  Email This Post ⋅  Print This Post ⋅ Post a comment

4 Mar 2008 - Silver Lake Partners announced yesterday that it closed its third tech-focused buyout fund with $9.3 billion in committed capital. LBO Wire and peHUB broke the story but Silver Lake has not confirmed it publicly.  This fundraising started back in 2006 with $7.5bn target.  Silver Lake’s previous fund closed at $3.6bn.  Silver Lake is still fundraising for its new $750mn+ middle market fund.  CalPERS bought a 10% stake in the private partnership which valued the firm at $2.75bn in 2008 but Silver Lake has not announced an acquisition this year.  Obviously, debt for buyouts is unavailable right now but given the recent and growing weakness in global technology spending caused by the U.S. recession Silver Lake is likely to see some cheap assets available for purchase.  Yet, Silver Lake won’t be able to get the returns it requires if it is unable to find attractive HY debt and bank debt to do a buyout.  Silver Lake’s last big purchase was Avaya this summer.  The Prince would wager that we will not see another big purchase from Silver Lake until this summer.  At that point much of the pipeline leveraged loans should be pawned off and companies will probably be cheaply valued with lots of excess cash on their balance sheets.