Thoma Bravo, amid fundraising frenzy, preps debut small-company fund

In the fundraising arms race in the private equity tech world, Thoma Bravo is bringing a new weapon to the arsenal. 

The firm is gearing up to raise its debut small-company fund, called Explorer. The fund will target up to $1 billion, two people with knowledge of the firm told Buyouts. 

The fund is expected to launch this month, one of the people said, and could have a first close this month, according to an investment report from the Arkansas Teacher Retirement System.

Explorer fund will be led by a team including Principal Carl Press, two vice presidents and two associates, along with the firm’s managing partners, the investment report said. Press joined Thoma Bravo in 2015, before which he was a tech investor at HighBar Partners, an associate in the special situations group at Oaktree Capital Group and an analyst at UBS, the investment report said.

Explorer fund will target investments in software and technology-enabled services companies with investments generally up to $150 million in companies with revenues ranging from $30 million to $150 million, according to the Arkansas investment report.

Thoma Bravo has a family of funds, including its flagship pool, a mid-market focused “Discover” fund and a credit vehicle. 

Last year, the firm closed its 13th flagship fund on $12.6 billion. It closed the second Discover fund on $2.4 billion in 2018. And it raised $750 million for its first credit pool last year, and is already in market with its second credit fund targeting $1 billion, Buyouts‘ sister publication Private Debt Investor wrote in September. 

The firm is expected to launch its 14th flagship pool this year that could target up to $15 billion, Bloomberg reported in October. 

A spokespeople for Thoma Bravo declined to comment. 

Thoma Bravo’s small-company fund comes after the firm’s main rival in the enterprise software sector Vista Equity, raised two small-company funds that it calls “Endeavor” funds. Vista closed its second Endeavor fund on $850 million in July. 

Thoma Bravo is the successor firm to Golder Thoma & Co, launched in 1980 by Carl Thoma and Stanley Golder. Golder Thoma became Golder, Thoma, Cressey, Rauner, according to an investment report from the Los Angeles City Employees’ Retirement System. 

GTCR in 1998 split into two firms, one of which was Thoma Cressey Equity Partners, the report said. That firm was formed by Carl Thoma, Bryan Cressey and Lee Mitchell. In 2008, Thoma Cressey Equity was renamed Thoma Bravo after Orlando Bravo joined and Cressey departed, the report said. 

Thoma Bravo’s 12th fund had a 14.13 percent internal rate of return since inception as of March 31, 2019, according to performance information from California State Teachers’ Retirement System. 

Update: This article has been updated with various information from an Arkansas Teacher Retirement Association investment report.

Action Item: Check out Thoma Bravo’s Form ADV here: https://bit.ly/2txNdxe