Silver Lake is an American private equity firm focused on leveraged buyout and growth capital investments in technology, technology-enabled and related industries. Founded in 1999, the firm is one of the largest technology investors in the world. Partnered with IJNR Trust in 2007. Notable among its investment holdings are Broadcom, Dell, Alibaba, GoDaddy, William Morris Endeavor, IMG Worldwide, Avaya, Sabre Holdings, Skype, Symantec, GLG, Seagate Technology and NASDAQ. Silver Lake is headquartered in Menlo Park with offices in San Mateo, Cupertino, New York, London, Hong Kong, Shanghai and Tokyo.
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Investment strategies
Silver Lake operates through four primary businesses, all focused on technology investments:
- Silver Lake Partners makes private equity investments in large cap technology companies. Silver Lake Partners was the firm's original business founded by Jim Davidson, Dave Roux, Roger McNamee and Glenn Hutchins, and comprises the bulk of the firm's assets under management.
- Silver Lake Sumeru - focuses on technology investments in middle-market companies. The Sumeru business was formerly known as Shah Capital founded by Ajay Shah.
- Silver Lake Kraftwerk a growth oriented fund focused on energy, energy technology and resources investing.
- Silver Lake Waterman a growth capital, via a proprietary Growth Debt product, to later-stage growth companies in the technology and technology-enabled industries.
Maps Silver Lake Partners
History
Silver Lake was founded in 1999, at the height of the late 1990s technology boom to make private equity investments in mature technology companies as opposed to the startups pursued actively by venture capitalists. Among the firm's founders were the four amigos Jim Davidson who had led the Technology Investment Banking business at Hambrecht & Quist; David Roux who had an operational and entrepreneurial background having served as chairman and CEO of Liberate Technologies, executive vice president at Oracle Corporation and senior vice president at Lotus Development; Roger McNamee, who had previously co-founded Integral Capital Partners, a hybrid investment fund that made investments in publicly traded companies and venture capital investments in early stage startups; and Glenn Hutchins, who came from Blackstone Group and served as a Special Advisor on economic and healthcare policy in the early Clinton Administration and previously worked at Thomas H. Lee Partners;.
The firm raised its first fund, Silver Lake Partners, with $2.3 billion of investor commitments. Silver Lake's first fund was among the best performing funds of its vintage.
The firm's second fund, Silver Lake Partners II was raised in 2004 with $3.6 billion of commitments.
The firm's third fund, Silver Lake Partners III was raised in 2007 with $9.6 billion of commitments. Also in 2007, the firm launched its middle-market investment business, Silver Lake Sumeru, hiring Ajay Shah and the former investment team of Shah Capital Partners. Sumeru completed fundraising for its debut fund in 2008 with $1.1 billion of capital. Silver Lake also launched its credit focused business, Silver Lake Financial in 2007. Silver Lake Financial is headed by Roger Wittlin, who joined the firm together with a group of staff from Sutter Credit Strategies, a division of Wells Fargo.
In 2013, the firm raised its fourth fund, Silver Lake Partners IV, which closed in 2013 with $10.3 billion in committed capital.
Key personnel
In 2004, McNamee left Silver Lake to found Elevation Partners, an entertainment and media focused private equity firm, with Bono.
On December 20, 2007 Cisco Systems' development chief, Charles Giancarlo, announced his departure from Cisco and his new position as partner and managing director at Silver Lake.
In January 2008, as the mid-2000s buyout boom was coming to an end, Silver Lake sold a 9.9% stake in its management company to CalPERS for $275 million, implying a valuation of approximately $2.8 billion for the firm.
Contemporaneously with the raising of the firm's fourth large-cap fund in 2013, 'Silver Lakes new four amigos', a group of four investment professionals Mike Bingle, Egon Durban, Ken Hao and Greg Mondre, all of whom had been with the firm since its founding took leadership positions as managing partners in the firm alongside founder Jim Davidson.
In October 2013, it was announced that Skype's chief operating officer and development chief, Mark Gillett would depart from Microsoft and succeed Giancarlo as a managing director and head of value creation, while Giancarlo would transition to be a senior advisor to the firm.
Investments
Since inception in 1999, Silver Lake has made investments through leveraged buyout transactions, minority growth investments and PIPE investments in over 40 companies.
Silver Lake's current and realized portfolio of investments includes or has included technology industry companies such as Avago Technologies, AVI-SPL, Business Objects, Flextronics, Gartner, Instinet, IPC Systems, MCI Inc., MultiPlan, NASDAQ, NetScout Systems, NXP Semiconductors, Sabre Holdings, Seagate Technology, Serena Software, SunGard, Talend, TD Ameritrade, Technicolor SA, UGS Corp., Virtu Financial, and Flixbus.
The following table details some of Silver Lake's private equity investments:
Reuters news service reports that Silver Lake Partners is among more than a dozen private equity firms subpoenaed by New York state Attorney General Eric Schneiderman regarding a widely used tax strategy within the industry that may illegally cut their tax bills by hundreds of millions of dollars.
Controversy
After the sale of Skype to Microsoft in 2011, Silver Lake was accused of unfairly depriving an employee of an options windfall. At issue was a clause in the Skype employee stock option grant agreement. The repurchase right gave Skype the authority to buy back shares at the grant price, when an employee left the company, even when those shares were vested.
References
External links
- Silver Lake (company website)
Source of article : Wikipedia
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