Private equity firm Vector Capital has completed a $450-million restructuring of two vintage funds, Vector Capital II and III, with Singapore sovereign fund GIC and Goldman Sachs becoming the largest limited partners (LPs) in the two funds.
Goldman Sachs Asset Management’s Vintage Funds and GIC, in fact, led the transaction for the fund restructuring for US-based Vector Capital that is known to specialize in transformational investments in technology businesses, an announcement from the firm said on Tuesday.
While Vector Capital II, L.P is a 1999 vintage fund, Vector Capital III is a 2005 vintage fund. The vast majority of the remaining assets in Funds II and III include the two Vector portfolio firms Corel Corporation, a Canadian office and design software company and Seattle-based provider of security-related hardware WatchGuard Technologies.
“Importantly, this 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,” said Alex Slusky, Vector Capital’s Founder and Chief Investment Officer while announcing the funds restructuring.
To put in context, Corel Corporation last month acquired California based sales engagement platform firm ClearSlide Inc for an undisclosed amount while WatchGuard has clearly voiced its mood for acquisitions when CEO Prakash Panjwani in July said that the company was expecting to make some acquisitions that may be a combination of organic and technology tuck-ins.
For the latest restructuring, Evercore served as financial advisor and Kirkland & Ellis LLP served as legal counsel to Vector Capital.
Choo Yong Cheen, Chief Investment Officer of Private Equity at GIC added, “We look forward to continuing the growth at Corel and WatchGuard, and to helping Vector maximize value at both companies. GIC believes in providing solutions that allow leading private equity managers to create long-term value in their companies. This includes, in select cases, the restructuring of funds like Vector II and III.”
With $3.5 billion of capital under management, Vector identifies and pursues investments in both the private and public markets. In February last year, it closed its fifth private equity fund, Vector Capital V at $1.4 billion, exceeding the Fund’s $1.2-billion target. Its previous fund, Vector Capital IV that was raised in 2007, had mopped up $1.2 billion for the closing.