Vector Capital, a leading U.S. private equity firm focusing on transformational investments in established technology businesses, has successfully completed a restructuring of Vector Capital II, L.P., a 1999 vintage fund, Vector Capital III, L.P., a 2005 vintage fund, and affiliated vehicles held by existing LPs for approximately $450 million.
The restructuring of the vintage funds was led by a consortium of LPs including Goldman Sachs Asset Management and Singapore sovereign-wealth fund, GIC Private Ltd. MJ Hudson advised one of the consortium members (unnamed), who also provided new capital for Vector Capital.
The investment by the consortium provides Vector Capital with follow-up funding for the businesses in the Vintage Funds’ portfolios, predominately Corel Corp. and WatchGuard Technologies Inc.
Fund restructurings generally enable GPs to turn around a particular fund that is not meeting expectations or is experiencing delays in exiting its portfolio by turning to external investors for additional capital or offering existing investors a route to liquidity. Once a bespoke structure has been put into place, the re-incentivised fund manager will be well placed to manage, grow and ultimately exit the portfolio investments, whilst existing investors and new investors will benefit from enhanced liquidity and GP alignment.
Evercore served as financial advisor and Kirkland & Ellis served as legal counsel to Vector Capital.
The MJ Hudson legal team was from its LP Unit – and the deal was led by Eamon Devlin (Managing Partner) and Robert Eke (Associate).