Insight Partners, the venture giant with stakes in hundreds of technology companies worldwide, raised $1.3 billion in commitments for a continuation fund, missing a target of more than $2 billion.
(Bloomberg) — Insight Partners, the venture giant with stakes in hundreds of technology companies worldwide, raised $1.3 billion in commitments for a continuation fund, missing a target of more than $2 billion.
The pool of cash will help extend the life of investments in the software sector across six of the firm’s funds, New York-based Insight said Thursday in an emailed statement, helping it to avoid having to sell stakes prematurely as the funds near maturity.
The final close of the continuation fund suggests that Insight’s investors, or limited partners, balked at the firm’s earlier valuation of the underlying assets, a quandary that has beset other venture capital and private equity firms. The Wall Street Journal reported the initial fundraising goal last year.
Read More: Private Equity Fees at Risk as Continuation Funds Lose Luster
Private assets faced steep markdowns as tech stocks plunged in 2022, the market for initial public offerings dried up and institutional investors, such as pensions and endowments, retreated. Investment firms use continuation funds to move assets into new vehicles to avoid being forced to sell them at unfavorable prices as the previous funds reach maturity. It also allows them to keep charging management fees on those assets from existing or new clients.
HarbourVest, Lexington
Insight’s Continuation Fund II was led by HarbourVest Partners and Lexington Partners along with “a large portion” of existing investors in the specific assets, according to the statement.
The new vehicle will take stakes in software companies held by other Insight funds, and investors in those funds will have the option to be bought out of their holdings or stay fully invested.
The fund helps Insight “extend our relationship with portfolio companies from earlier funds, while enabling us to provide the option of more near-term liquidity to our LPs,” Managing Director and Chief Operating Officer Ian Sandler said in the statement.
Insight oversaw more than $75 billion of regulatory assets at the end of last year and had stakes in more than 750 companies globally, according to its website.
–With assistance from Allison McNeely.
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