Francisco Said to Target More Than $3 Billion for Tech Buyouts

(Bloomberg) -- Francisco Partners, a technology-focused private equity firm, is targeting more than $3 billion for its fifth buyout pool, according to people with knowledge of the matter.

The San Francisco-based firm is planning to start collecting money in the fourth quarter, said the people, who asked not to be identified because they weren’t authorized to speak publicly. It has yet to set a limit, known as a hard cap, for the pool, the people said.

A spokesman for Francisco Partners declined to comment.

Francisco Partners finished raising about $2.9 billion for its fourth fund in 2015. That pool was producing a 7.6 percent annualized return as of Dec. 31, according to data compiled by Bloomberg. Its previous fund, a $2 billion pool raised in 2011, was generating a 16 percent annualized return as of Sept. 30, ranking in the second quartile of similar funds from that year, the data show.

The firm is the latest tech-focused buyout player seeking a bigger fund as investors flock to the sector. Software-focused Vista Equity Partners finished raising $11 billion for its sixth pool this month, after getting $5.8 billion for its predecessor fund in 2014. Thoma Bravo amassed $7.6 billion last year for its latest vehicle, after collecting $3.65 billion in 2014. And Silver Lake raised $15 billion in about four months earlier this year, compared with $10.3 billion for its previous pool.

Led by founding partner and Chief Executive Officer Dipanjan Deb, Francisco Partners owns stakes in companies including SmartBear Software and IT administration and security company Quest Software, according to the private equity firm’s website.

To contact the reporter on this story: Kiel Porter in New York at kporter17@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Devin Banerjee