Diversis Capital Management, LP (“Diversis” or the “Firm”), an operationally focused private equity firm making growth-oriented investments primarily in software companies, today announced the final closing of its inaugural fund, Diversis Capital Partners I, L.P. (the “Fund”), at its hard cap with aggregate capital commitments of $255 million, surpassing its target of $200 million just six months from launch.
Diversis is led by Managing Directors Ron Nayot and Kevin Ma, who co-founded the Firm in 2013. The Fund will continue the Firm’s strategy of making operationally focused control private equity investments in lower middle market companies, many that require a true partnership angle that could use both growth capital and operational guidance. The Fund will invest primarily in businesses based in North America, and selectively in Europe, and intends to make investments across multiple sectors, but focus primarily on opportunities in software, where Diversis sees the requisite complexity, value and opportunity for hands-on collaboration and transformation.
Diversis will apply a disciplined investment philosophy to acquire assets with strong core foundations that can use the Firm’s combination of growth capital, operational support and a unique strategic approach to excel beyond their current limitations. Diversis is focused on corporate carveouts, partnering with founders on their next chapter, and with VC firms on recapitalizations by providing unique flexibility in its transaction structures. Diversis utilizes a robust investment team and the expertise of 19 operating partners and advisors who play a pivotal role during due diligence and the ownership cycle.
The fund raising follows a number of successful investments and a realization to date. Diversis has built a portfolio of current investments, including Tempo ehf, a leading time management and utilization software company and, most recently, PureCars Technologies, LLC, an automotive business intelligence and marketing platform solutions provider. It has completed a highly successful recent exit in Blue Software, LLC, which the firm built into a stand-alone entity from a corporate carveout in 2014. After integrating a number of successful add-on acquisitions and investing in technology enhancements, among other initiatives, Diversis successfully exited its investment with a sale to Danaher Corporation in 2018.
Co-Founder, Mr. Ma, said, “We are truly humbled and grateful for the support of our investors and we look forward to partnering with them for many years to come. This will be an exciting new chapter for us and we spent a long time preparing ourselves to meet this head on. We’ve built Diversis carefully over the last six years brick by brick and have assembled an extremely specialized, tight-knit team that is well-positioned to take advantage of the software and technology opportunity set in the lower middle market.”
The Fund generated high demand from an investor base comprised of leading endowments and foundations, investment advisers and fund-of-funds, public and private pension plans, family offices, and financial institutions.
“We want to thank our investors for their support and confidence in our team and strategy as we continue the evolution of our Firm. Just as important as being uniquely focused on the combination of growing and optimizing companies, we have fostered collaboration and partnership that has also extended beyond our internal teams to our portfolio companies, investors and even counterparties. We are excited about the changes this fundraise brings to our organization and as always will continue to push forward using technology to create competitive advantages within our investments,” said Mr. Nayot.