Vista Equity Partners, the in-demand technology-focused private equity firm, has introduced flexible terms on carried interest across its latest two fundraises.
This week it closed its smaller buyout fund, Vista Foundation Fund III, above its $2.5 billion target on $2.75 billion. The fund has a standard 8 percent preferred return, but charges three different levels of carried interest, depending on its return multiple, according to fund terms and conditions seen by private funds management. It will charge a 20 percent carry if the performance is below a 2.5x multiple; 25 percent if the fund generates between 2.5x and 3.0x multiples; and 30 percent if it returns more than 3.0x multiple.
There is also an offering of 100 percent fee offsets, according to a fund commitment proposal presented to the New Jersey State Investment Council. VFF III did not use a placement agent, and Kirkland & Ellis acted as legal advisor.
Earlier this week, sister publication PEI reported that VEPF VI offers two classes for LPs. Terms for Class A LPs include a 30 percent carried interest, 10 percent hurdle rate, and 1 percent management fee, which falls to zero after the initial 10-year fund life expires, regardless of any fund extensions. Terms for Class B LPs include a 20 percent carried interest, 8 percent preferred return, and 1.5 percent management fee that will remain throughout the whole fund lifecycle, including any extensions, it said.