Sunstone Partners, a growth-oriented private equity firm, has held the final institutional close of its oversubscribed $925 million third fund, Sunstone Partners III (Fund III), at its hard cap.
Fund III, which more than doubles the total committed capital managed by Sunstone Partners, is the firm’s largest fund to date and brings total committed LP capital to $1.7 billion since inception in 2015.
Sunstone Partners received strong support from its existing investor base of leading endowments, foundations, family offices, fund-of-funds and pension funds, while also adding a number of new institutional investors.
Consistent with the strategy of prior funds, Sunstone Partners will focus on growth equity and growth buyout investments in profitable technology-enabled services and software companies, typically founder-owned. Sunstone Partners targets investments of $50 million to $150 million of equity capital per portfolio company. The firm has deep expertise in several sectors including cloud services, health care IT, cybersecurity and marketing technology.
Since its inception in 2015, Sunstone Partners has made 39 investments, including 13 platforms and 26 add-ons. Sunstone has achieved full or partial realisations on its first three platform investments: Onica, a cloud consulting and managed services company, which was acquired by Rackspace in 2019; UserZoom, a SaaS platform focused on the digital user experience and usability testing, which was acquired by Thoma Bravo in 2022; and NETSPI, a leader in enterprise penetration testing and attack surface management, which announced its acquisition by KKR in October 2022.
