NPS to invest in Silver Lake’s $20 bn tech fund

The National Pension Service has decided to invest in a $20 billion technology fund that Silicon Valley-based Silver Lake Partners recently closed, for which the South Korean pension fund is estimated to have committed $200 million to $300 million, according to investment banking sources on Jan. 26.

Silver Lake Partners VI, the latest fund of the technology-focused private equity firm, raised the record amount of capital for any of its flagship funds. Participants in the new vehicle include NPS, Teacher Retirement System of Texas and State Teachers Retirement System of Ohio, the sources told the Market Insight of The Korea Economic Daily.

Back in 2017, NPS invested in Silver Lake’s predecessor fund that raised $15 billion.

The $700 billion pension scheme has increased allocations to large-size technology funds, with the global pandemic expected to accelerate technology-driven innovation across industries.

Last year, NPS committed $100 million to Thoma Bravo Fund XIV, a $17.8 billion fund of the US technology-investing firm, along with the Korean Teachers’ Credit Union (KTCU) which also committed $100 million to the fund. That marked NPS' first participation in a vehicle of Thoma Bravo, which acquired US real estate management software provider RealPage Inc. for $9.6 billion last month.

Additionally, NPS has already put an undisclosed sum into a fund of Vista Equity Partners, one of the three leading US technology-focused PEFs.

Silver Lake manages $75 billion in combined assets and committed capital. It makes large-scale, growth investments in technology, technology-enabled and related growth industries, ranging from semiconductor and software to cybersecurity, e-commerce and transportation, healthcare, financial services and media sectors.

Earlier last year, Silver Lake invested in Airbnb at the height of the pandemic-caused liquidity problems at the vacation rental site operator. Airbnb's Nasdaq listing last month translated into hefty gains for Silver Lake. Its other investments include Twitter, online travel agency Expedia, China’s e-commerce firm Alibaba and India’s technology company Jio Platforms, as well as the English soccer club Manchester City and the mixed martial-arts organization UFC.

In September of last year, Abu Dhabi sovereign wealth fund Mubadala Investment Co. contributed $2 billion as a seed investor in Silver Lake’s latest flagship fund.

Write to Jung-hwan Hwang and Jun-ho Cha at jung@hankyung.com
Yeonhee Kim edited this article.