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TA Associates closes recapitalisation fund

Select Opportunities Fund II has raised $1.25bn to invest in 'recapitalisations of high-performing TA portfolio companies', the growth investor says.

TA Associates has held the final close on a fund that allows it to double down on its best assets.

The Boston-headquartered growth investor hit the $1.5 billion hard-cap on TA Select Opportunities Fund II, which will invest in “recapitalisations of high-performing TA portfolio companies” with significant growth prospects, according to a statement.

“Many of TA’s investors have been our partners for decades, and we are extraordinarily grateful for their long-term support,” said chairman Brian Conway.

Los Angeles County Employees’ Retirement Association and New Mexico State Investment Council are among the limited partners in the fund, both committing $40 million, according to PEI data.

Predecessor TA Select Opportunities Fund raised $1 billion by final close in November 2019 from investors such as Alaska Permanent Fund, California State Teachers’ Retirement System and Virginia Retirement System.

TA’s Select Opportunities funds typically target portfolio companies being sold by its flagship vehicle, affiliate title Buyouts reported in January 2020. TA’s main fund takes a minority stake in the business it is offloading, with the Select Opportunities Fund co-investing alongside the new third-party investor. In January 2020, the Select Opportunities Fund reinvested in real estate-focused MRI Software alongside buyer Harvest Partners.

The Select Opportunities Fund does not charge a management fee and instead collects fees from portfolio companies, Buyouts noted. The vehicle charges a 20 percent carried interest rate. It is not clear if these terms apply to Fund II.

TA also said Wednesday it had held a $12.5 billion final close on its 14th flagship fund, exceeding its target of $10.5 billion after less than six months in market. The fund will target businesses in five industries: technology, healthcare, financial services, consumer and business services, writing cheques of between $100 million and $600 million.

TA has raised $47.5 billion in capital since its founding in 1968, according to its website.

In March, Secondaries Investor reported that tech investor Insight Partners was raising a $1.25 billion fund to invest in its own portfolio companies. Insight Venture Partners X Follow-On Fund will make primary and secondaries investments in assets held by 2017-vintage Insight Venture Partners X.

“Many Fund X investments are presenting attractive follow-on investment opportunities beyond Fund X’s capacity,” the GP said in pension documents.