Thoma Bravo Raises $3.65 Billion Fund for Buyouts

Thoma Bravo, a private equity firm focused on technology companies, is expected to announce on Monday that it has raised $3.65 billion for a new fund.

The fund is the largest ever raised by Thoma Bravo, exceeding by more than $1 billion the goal set by the firm when it began raising the capital in January. Thoma Bravo’s previous fund totaled $1.7 billion.

The demand for the new fund probably reflects investor appetite for mature technology companies, which are Thoma Bravo’s specialty. The firm in recent years has completed buyouts of Blue Coat Systems, an 18-year-old maker of enterprise security software, and Deltek, an enterprise software company founded in 1983.

It also reflects Thoma Bravo’s willingness to make bigger deals.

“I think there is a little bit of a tech bubble at this moment, and that has pushed up valuations,” Orlando Bravo, a managing partner of the firm, said in an emailed statement. “However, our investment strategy is focused on immediately reducing a company’s operating costs and improving its profitability.”

Mr. Bravo added, “We feel we can do well even in periods of relatively higher valuations.”

With the new war chest, Thoma Bravo could team up with its limited partner investors to write equity checks as large as $1 billion, Mr. Bravo said. That could translate into leveraged buyouts as large as $5 billion. Still, bigger deals are likely to be an exception to the rule.

Private equity firms have recently been raising capital at a rapid clip, as pension funds and other big investors seek market-beating returns. One giant firm, Apollo Global Management, raised a $18.4 billion fund in January. And Bain Capital raised $7.3 billion in April.

These firms now face the challenge of spending all that cash, at a time when stock markets are relatively buoyant. Many private equity firms are looking for unique situations where they can make use of their particular skills, seeking to avoid competitive auctions that can drive up valuations.

Thoma Bravo, which has offices in Chicago and San Francisco, and traces its history to a predecessor firm that was established in 1980, has developed a playbook for technology deals. Mr. Bravo said the firm likes to help companies make the transition from licensing software to selling it through the cloud, a delivery method called software as a service.

But even as these software trends evolve, much about technology has remained consistent, he said by phone.

“We’re pursuing the same companies we were pursuing 10 years ago,” Mr. Bravo said. But because of acquisitions and organic growth, “they’re now much larger.”