With changing market conditions, companies have needed to shift their mindset to focus on generating profitable growth, and many are realizing that doing so in the public markets may prove difficult. In this context, the enterprise software sector represents significant investment opportunities for growth.
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With changing market conditions, companies have needed to shift their mindset to focus on generating profitable growth, and many are realizing that doing so in the public markets may prove difficult. In this context, the enterprise software sector represents significant investment opportunities for growth.
“Public companies are continuing to transition their focus from ‘growth at all costs’ to profitable growth. These companies are realising the benefits of being private and having the ability to make necessary operational changes outside of the public markets,” notes Jennifer James, Managing Director, Chief Operating Officer and Head of Investor Relations & Marketing at Thoma Bravo.
This is where a partner like Thoma Bravo can step in. “The public markets are not valuing these companies the same way that we do,” explains James, “even during times of deceleration and drops in share price, we can see the immense value these innovative companies have to offer and the accompanying growth potential.”
As capital is increasingly scarce, LPs have become more selective in who they partner with. Further, in the current economic and geopolitical environment, these investors are focused on backing proven managers with strong track records in compelling sectors.
“Given the business-critical nature of software and its attractive recurring revenue profile, we remain excited about the opportunities in the market and work hard to aim to deliver for our investors who have maintained their confidence in Thoma Bravo’s vision, strategy and approach,” James states.
As awareness and focus on sustainability continues to increase across the investment industry, Thoma Bravo has strengthened its commitment to this approach. ESG is a key part of the firm’s journey, which was galvanised by the recruitment of Donna Riley Bebb, appointed to the newly formed role as Head of ESG. James details: “Since Donna joined the firm, we became a signatory to the UN Principles for Responsible Investment, which provides standardised reporting requirements so we can offer increased transparency to our LPs.”
Delving deeper into existing investment opportunities, James outlines that, with the syndicated markets closed, it has been more challenging to get deals done. However, Thoma Bravo can lean on private credit, and – when appropriate – all-equity transactions to continue making investments and building great companies. James says: “This approach helps enable us to execute transactions regardless of the macro-economic environment and allow our team to continue investing in innovative companies and focus on driving sustainable, profitable growth.”
Regarding specific opportunities, James points out the resilience of software and the significant impact it has on businesses across industries globally: “We are seeing many high-quality software companies, particularly in the public markets, facing challenges in their performance, but this also presents a significant opportunity to partner, provide operational expertise and work towards building best-in-class companies.”
Future opportunities in the enterprise software sector are ripe, and James believes the appetite for private assets will only continue to increase: “This is where we see the potential to unlock sustainable growth and deliver value for investors.”
Jennifer James, Managing Director, Chief Operating Officer and Head of Investor Relations & Marketing at Thoma Bravo – Based in San Francisco, Jennifer joined the firm in 2015 with 20 years of experience in private equity/venture capital investor relations, fundraising, and marketing. Today she leads Thoma Bravo’s business operations strategy, efforts to serve the needs of new and existing investors, and the firm’s industry communications programs. Wall Street Journal and WSJ PRO Private Equity named Jennifer one of the Women to Watch in fundraising, and San Francisco Business Times honoured her as one of the Most Influential Women in the Bay Area. Before Thoma Bravo, she served as Partner, Investor Relations & Marketing, for Sofinnova Ventures. Previously, she served as Director of Marketing & Communications for Alta Partners, and she held several marketing and financial services leadership roles. Jennifer earned her MBA from Northwestern University and her AB degree in History from Bowdoin College.
