Chicago-born private equity firm Thoma Bravo is raising $16.5 billion in its latest and largest fund, just over a year after it raised a $12.6 billion investment fund.
The firm, named for its founding partners Carl Thoma in Chicago and Orlando Bravo in San Francisco, announced the new fundraising target in a filing with the Securities and Exchange Commission on May 22.
Thoma Bravo has become a buyout juggernaut in the software arena, delivering returns that have fueled its ongoing big-dollar fundraising. This is the 14th investment fund the firm has raised, tapping institutional investors for money to invest in acquisitions that Thoma Bravo aims to make more profitable.
Bravo has previously attributed its success to its partners’ “deep sector expertise” in the software industry and their ability to work with the existing management of companies they purchase. As software company targets have become bigger, prices and competition to buy them have also grown, he said last year. The firm’s center of gravity has shifted west in recent years as Bravo has taken on more leadership responsibility.
Private equity firms typically buy companies and then add to them, usually via additional acquisitions. They also aim streamline the business by cutting costs and jobs along the way. Ultimately, they aim to boost profits so they can deliver returns to investors.
Thoma Bravo has continued to do deals through the coronavirus pandemic, despite a general slowdown in merger and acquisition activity. Earlier this week it closed on the sale of Detroit-based Compuware mainframe software company to BMC, without disclosing a price. In January, Bloomberg reported that sale could be in the offing and valued it at about $2 billion, including debt, citing people familiar with the matter.
