Vector Capital

Vector Capital
Private
Industry Financial services, Investment management
Founded 1997
Headquarters One Market Plaza
San Francisco, California
Products Private equity
Total assets $3.3 billion
Number of employees
 40+
Website www.vectorcapital.com

Vector Capital is a private equity firm focused on value-oriented investments in technology companies. The firm invests across a range of situations including acquisitions of private companies, spinouts of non-core businesses from corporations, leveraged recapitalizations, as well as public-to-private buyouts.

The firm, which is based in San Francisco, was founded in 1997. The firm has raised over $4 billion since inception across five private equity funds. Vector is currently investing out of Vector Capital V, a $1.4 billion investment fund raised in 2017.[1]

History

Vector Capital traces its origins to 1997, when the team, led by Alex Slusky, completed a spinoff from Ziff Brothers Investments. The Vector team had begun making investments in the 1990s with financial support from the Ziff family, founders of Ziff Davis Media. William Ziff's sons Dirk, Robert, and Daniel manage the family's investments through Ziff Brothers Investments. Slusky led the technology equity practice at Ziff Brothers Investments, managing a portfolio of public and private technology investments.[2] Slusky had previously been a venture capitalist at New Enterprise Associates.[3]

Corel

Its Corel purchase was characterized as a "strip and flip" by Nanette Byrnes of Bloomberg.[4] According to Byrnes, "By ramping up Corel's debt from next to nothing to as much as $140 million prior to a May 2 [2006] initial public offering, Slusky has been able to secure a payout in cash dividends and stock sales of more than three times Vector's $58 million investment."[4] In November 2009, a Vector-controlled holding entity took Corel private again.[5] Since then, Corel, has continued to make numerous additional acquisitions.[6][7] It currently remains in the Vector portfolio.

Technicolor SA

In June 2012, Vector won the shareholder vote to inject $242 million into Technicolor SA, a company focused on technology and digital media. The shareholders supported Vector's proposal over a rival proposal from JP Morgan.[8] In 2015, Technicolor purchased the Scientific Atlanta division from Cisco for $600 million.

Private credit business

In addition, the firm has a private credit business that invests in distressed debt or lends directly to technology companies. Consisting of special vehicles and hedge funds, the credit business has about $400m of assets under management. Vector tends to focus on more junior tranches of debt such as second-lien and unsecured debt. Slusky was quoted remarking on the credit business: “We’ll leave safe, secured debt to banks.”.[9]

Notable investments

Among the firm's notable investments are Aladdin Knowledge Systems,[10] CollabNet,[11] Corel,[12] Gerber Scientific,[13] LANDesk, Register.com, SafeNet, Savi Technology, Technicolor SA,[14] and WinZip.

References

  1. ↑ "Vector Capital Raises $1.4 Billion for Fund V". www.businesswire.com. Retrieved 2017-03-20.
  2. ↑ Alex Slusky - MBA 1992. Harvard Business School
  3. ↑ Lewis, Michael. The new new thing: a Silicon Valley story. W. W. Norton & Company, 2000 p. 80
  4. 1 2 "Beyond The "Strip And Flip"". Bloomberg.com. Retrieved 2016-07-12.
  5. ↑ Wauters, Robin. "Corel Buys Out Corel". TechCrunch. Retrieved 2017-03-20.
  6. ↑ "Roxio - Corel Completes Acquisition of Roxio Business from Rovi Corporation". www.roxio.com. Retrieved 2017-03-20.
  7. ↑ "Corel acquires Pinnacle Studio" (PDF).
  8. ↑ Schechner, Sam; Daniel, Marc (2012-06-20). "Vector Wins Technicolor Deal, Topping Bid From J.P. Morgan". Wall Street Journal. ISSN 0099-9660. Retrieved 2017-03-20.
  9. ↑ "Capital Structure Article" (PDF).
  10. ↑ Vector Takes Aladdin in $160 Million Deal. New York Times, January 13, 2009
  11. ↑ Vector Capital Makes Controlling Investment In CollabNet Developer Platform Techcrunch, January 31, 2014
  12. ↑ Corel Says Takeover Needed to Prevent Collapse. New York Times, November 24, 2009
  13. ↑ Gerber Scientific Consents to Private Equity Buyout Offer of $281M. Fox Business, June 13, 2011
  14. ↑ Vector Capital Buys Into Technicolor. Deadline.com, June 21, 2012
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