Overview of the Thoma Bravo XVI and Discover V Funds

Thoma Bravo is now one of the most prominent private equity firms in the software sector in North America. Founded by Carl Thoma, a pioneer in LBO the 1980s, and Orlando Bravo, the firm is part of a long tradition of specialized investing, stemming in particular from the legacy of Golder, Thoma & Co. Since its split from Thoma Cressey in 2008, Thoma Bravo has focused exclusively on software companies, while Cressey has shifted its focus to the healthcare sector.Thoma Bravo’s strategy is based on leveraged buyouts (LBO), as well as carve-outs (the acquisition of divisions from large conglomerates) and delistings. The objective is clear: to take control of technology companies with significant potential for operational improvement. The firm follows a highly structured “playbook,” developed over several decades, which aims in particular to rapidly optimize margins starting in the first year of ownership. This operational improvement lever is often combined with an external growth strategy, enabling accelerated development and industry consolidation. This highly operational approach largely explains Thoma Bravo’s remarkable and consistent performance. Historically, its mature funds have posted an average return of nearly 2.9 times net investment, with an internal rate of return (IRR) of approximately 29%. Even when excluding the outliers (the best- and worst-performing funds), performance remains high, at around 2.8x and IRR of 27%, demonstrating strong consistency over time.Another key factor is sector specialization. By focusing exclusively on software, Thoma Bravo benefits from in-depth expertise and the ability to quickly identify value creation drivers, particularly in a sector characterized by recurring revenue, high margins, and strong consolidation potential.As part of the Vintage Altaroc Odyssey, two complementary Thoma Bravo strategies were selected: a large-cap fund (Thoma Bravo XVI, with a target of $20 billion) and an upper mid-market fund (Discover V, with a target of $7 billion). This combination allows the firm to capture opportunities in both large technology platforms and smaller, often more dynamic companies.In summary, Thoma Bravo embodies a private equity approach based on specialization, operational excellence, and disciplined execution. Its track record of performance, coupled with a clear focus on software, makes it a Fund manager for investors seeking both long-term growth and resilience.