Silver Lake Technology Unit Said to Spin Off to Raise Fund

Apr 30, 2014 3:17 pm ET

(Updates with management of investments in fifth paragraph.)

April 30 (Bloomberg) -- The middle-market unit of Silver Lake Management LLC, the biggest technology-focused private- equity firm, has spun off as a separate company after its parent abandoned efforts to raise a $1 billion fund, according to three people with knowledge of the matter.

The new firm, led by Kyle Ryland and now completely independent from Silver Lake, is seeking $600 million to make private-equity investments in growth-oriented technology companies, said the people, who asked not to be identified because the information is private. The final fund size might change depending on demand, the people said.

Silver Lake’s middle-market unit, known as Silver Lake Sumeru, this year decided against pursuing another fund because managing directors Ajay Shah and Hollie Moore Haynes were reducing their roles. Shah and Haynes “are not committed to pursuing a second SLS fund,” said the Menlo Park, California based firm in a letter to investors obtained by Bloomberg News in February, referring to the business by its initials.

Gemma Hart, a spokeswoman at Brunswick Group LLP, declined to comment on behalf of Silver Lake. Ryland didn’t respond to an e-mail seeking comment.

Current Investments

Shah will be part of the new firm, although his involvement is unclear, said the people. Haynes won’t be participating in the new fund, the people said. The former Silver Lake Sumeru team will continue to manage the current portfolio of investments on behalf of clients until they exit the companies through strategic sales or public offerings.

The Sumeru arm raised $1.1 billion for its first fund in 2008. It backed PrimeSense Ltd., the Israeli maker of motion- tracking chip technology that was acquired by Apple Inc. last year.

The firm in August sold Smart Storage Systems Inc. for $307 million to SanDisk Corp. It sold Power-One Inc., a renewable energy company, in July for about $1 billion.