Silver Lake, the largest technology-focused private-equity manager, has raised more than $4 billion since it started marketing its latest buyout fund, said two people with knowledge of the matter.
The fund, Silver Lake Partners IV LP, is seeking $7.5 billion and has the option of gathering as much as $10 billion, according to a marketing document sent to prospective investors in March, a copy of which was obtained by Bloomberg News.
Gemma Hart, a spokeswoman for Silver Lake, declined to comment.
The firm, based in Menlo Park, California, gathered the commitments in a crowded fundraising market as a record 1,858 private-equity funds are competing for capital, according to data compiled by London-based researcher Preqin Ltd. Advent International Corp. held an initial close last month on 5.8 billion euros ($7.1 billion) toward its 7 billion-euro target after also sending out marketing materials in March, according to a person familiar with the situation.
Investors who make larger commitments to the new fund will get a break on management fees, Silver Lake’s documents show. Limited partners, led by public pensions, have pressed private-equity managers to lower management fees to ensure that the buyout firms make the bulk of their profits from their cut of successful investments.
The prior fund, Silver Lake Partners III LP, generated a net multiple of 1.4 times invested capital and a net internal rate of return of 19 percent, as of Dec. 31, according to the document. The fund had distributed about $5.4 billion in cash.
Skype Technologies SA, an investment in the third fund, produced more than a threefold profit for clients when the video-chat company was sold to Microsoft Corp. last year.
The firm’s best returns came from its $2.3 billion debut fund, Silver Lake Partners LP, raised 13 years ago. That pool produced a net multiple of 2.5 times invested capital and a net internal rate of return of 25 percent, as of Dec. 31.