Santa Clara, Calif.-based Shah Capital will continue managing a $250 million fund it raised in 2004. But Shah will also begin fundraising for a $750 million fund under the Silver Lake umbrella, starting in the first quarter, persons said. Silver Lake, with offices in Menlo Park, Calif., and New York, is currently fundraising for its own $7.5 billion fund. Silicon Valley tech buyout firms Silver Lake Partners and Shah Capital Partners plan to join forces and will together be able to target both large and middle-market companies, sources confirmed Thursday, Nov. 9.
Highlights:
- Silver Lake wants to enter the technology middle market because "that's where the best returns can be earned right now," said Alex Slusky, founder and managing partner of Vector Capital Corp., a San Francisco private equity firm also focused on techs.
- Shah typically invests in middle-market tech firms. Shah, in August, led a consortium to buy Thales Navigation (now Magellan Navigation Inc.), a provider of automotive navigation systems, for $170 million. In July 2003, Shah teamed up with Francisco Partners Management LLC to buy NPTest Inc., a provider of testing and diagnostic products equipment, for $220 million. Shah took NPTest public six months later and then sold the company in 2004 to Credence Systems Corp. for $660 million in cash and stock.
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