General Atlantic is seeking to raise $5 billion for its fourth flagship fund to invest in growth equity deals as it increases its bet on a long-held strategy that’s now sparking interest from more traditional buyout players.
The firm, which has backed big-tech companies including Uber Technologies Inc. and Airbnb Inc., has already gathered $3 billion for the fund and is aiming for a June close, according to a person with knowledge of the matter. The latest money-raising effort would bring total committed capital to $20 billion to pursue investments in fast-growing startups, the person said.
A spokeswoman for New York-based General Atlantic, which manages more than $53 billion, declined to comment.
General Atlantic, which has made more than 400 growth investments since its founding in 1980, is seeking fresh cash as others in the industry race to snag pieces of such companies. Blackstone Group Inc. recently raised $4.5 billion for its first growth equity fund and has made several investments in the sector. Last year, the value of growth equity deals reached a record $62.5 billion, even as private-equity transactions dipped overall, according to data compiled by PitchBook.
General Atlantic raised $3.3 billion for its third closed-end investment fund, which has generated a 28% net return from its inception in 2017 through the end of last year, said the person. Several of the fund’s biggest positions include healthcare and tech names such as Landmark Health, digital-banking firm Chime, Indian e-learning company Byju’s and Royalty Pharma Plc, which went public last year.
This year, General Atlantic is targeting the surging market for initial public offerings. The firm is on pace to have more of its portfolio companies go public in 2021 than in any other year on record, according to another person with knowledge of the matter, with website-hosting service Squarespace and restaurant chain Torchy’s Tacos among those planning public listings. So far, the firm has completed four IPOs, including Alignment Healthcare Inc.’s debut last week, with a fifth on the way following Alkami Technology Inc.’s filing earlier this month.
The most IPOs General Atlantic has seen across its portfolio in an single year is six, with a half dozen firms going public in 2019 and again last year, the person said. General Atlantic, led by Chief Executive Officer William Ford, has 135 portfolio companies.
General Atlantic has also been in the spotlight for its 2018 investment in London-based Greensill Capital, which collapsed into insolvency this month. Since its initial $250 million investment, General Atlantic has reduced its holding by half and now owns a 7% stake in the supply-chain finance company, another person said.