TA Associates bucks private equity trend with $16.5bn fundraising

US private equity firm TA Associates has raised $16.5bn for its latest flagship vehicle, bucking industry-wide fundraising challenges as higher interest rates and falling public valuations cause investors to retrench.

The new venture achieved a record size for the Boston-based group, 32 per cent larger than the $12.5bn fund TA raised in June 2021.

The sum is a sign that despite investor caution, a handful of specialised, privately held firms such as TA continue to pull in investor cash, closing a gap with listed rivals.

Private equity funds raised $347bn globally in 2022, down 16 per cent from $413bn the previous year and 5 per cent below the average of the past five years, according to Bain & Co. Fundraising is expected to slow further this year, Bain said, while some publicly listed firms have pared their goals and even delayed fund closings.

TA and privately owned rivals such as Veritas Capital, Thoma Bravo and Francisco Partners are among the fast-growing US-based investment groups that have corralled cash from investors, however. TA began raising its latest fund last November and beat its initial target of $15bn in less than a year, according to the company.

With the current fund closed, TA has now raised nearly $40bn across three corporate buyout funds since 2019. Overall assets in the firm, founded in 1968 by Peter Brooke, now total $65bn.

Large listed buyout groups Blackstone, Apollo Global and Carlyle have all said in recent months that funds they are currently raising will fall short of their initial targets, blaming investors’ overexposure to private assets. Carlyle warned last month that its current funds would fail to exceed the size of their predecessors.

“[It’s] a tough fundraising environment and particularly in buyout funds,” Curt Buser, Carlyle chief financial officer, said last month on an earnings call. “In the aggregate, the dollars are going to be lower than what the predecessors were.”

TA, which is led by chief executive Ajit Nedungadi, is known in the private equity industry for having large teams search for new investments by reaching out to other private groups and founder-run companies. The group focuses on making minority and control investments in technology, consumer, healthcare and business services companies.

It also is known for aggressively expanding investments using acquisitions. Last year, TA invested $6.5bn in 20 different companies and saw its existing investment holdings make nearly 300 acquisitions amid volatile markets.

TA has gone through multiple succession plans since its founding by private equity pioneer Brooke. Nedungadi was named chief in 2021, taking over day-to-day responsibilities of the firm from Brian Conway, who had led TA since 2014 and remains its chair.

Nedungadi, a former Credit Suisse First Boston banker who also worked at privately held Trilogy Software, joined TA in 1999 and built its businesses in Europe and India before eventually overseeing investment operations.