Billionaire Robert Smith’s Vista Equity secures $11 billion in latest flagship fund

Vista Equity Partners, a global investment firm led by America’s wealthiest black businessman, Robert Smith, has raised $11 billion for its latest flagship fund, Vista Equity Partners VIII.

The $11 billion obtained under its $20-billion flagship fund, Vista Equity Partners VIII, which debuted earlier this year, is the firm’s third-largest amount of capital in the market among private equity funds.

The $20-billion fund, which includes a $250-million commitment from the Oregon State Treasury and another $150 million from the Teachers Retirement System of the State of Illinois, follows a 2018-vintage Fund VII which closed at $17 billion.

The latest fund’s capital will be deployed by the Smith-led investment group to make 18 to 25 control investments in large and higher mid-market enterprise software and technology companies predominantly in North America.

Vista announced in a due diligence report by the chief investment officer of Connecticut Retirement Plans and Trust Funds CRTPF that it will make a GP commitment of 10 percent or $2 billion to the flagship fund, which includes a dual-class management fee.

The fund’s Class-A management fee on aggregate commitments will step down to 1 percent of net contributed capital during the post-investment period, while the Class-B management fee of the total commitments, will be stepped down to 1.5 percent of net contributed capital during the post-investment period.

Vista Equity Partners is a private equity firm focused on software investments. Robert Smith founded the company in 2000, and it now has more than $50 billion in assets, with yearly returns of 22 percent since its founding.

Almost all of Smith’s $11.9-billion fortune, which ranks him 134th in the world according to Bloomberg estimates, stems from his stake in the Texas-based corporation.

Under Smith, Vista Equity continues to leverage its cash holdings and the recent decrease in the valuation of technology companies to take up stakes in companies with enormous economic potential.

In the first half of 2022, the private equity and permanent capital portfolios of Vista Equity added 11 new portfolio companies and closed 18 add-on transactions across the Flagship, Foundation, Endeavor, and Perennial funds.