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Key Points
- Vista Equity expects to save over $200 million annually by replacing private credit with syndicated loans across multiple portfolio companies.
- Vista is refinancing Finastra with $4.1 billion in syndicated loans, cutting into its $5.3 billion in high-cost private debt from 2023.
- The firm has also refinanced KnowBe4, Avalara, and Duck Creek, all acquired recently, to lower interest expenses.
Vista Equity Partners, the technology-focused investment firm led by Black billionaire Robert F. Smith, is changing how it finances its portfolio companies, a shift that could save more than $200 million a year in interest payments, according to Bloomberg estimates.
The private equity firm is moving away from private credit and leaning into the syndicated loan market. This change is taking shape: Vista is in the final stages of refinancing Finastra, a financial software provider, using over $4.1 billion in syndicated loans arranged by a group of banks including Morgan Stanley. The new funding replaces a chunk of the $5.3 billion in private debt Finastra took on in 2023, which at the time was the largest private credit deal on record.
Vista cuts debt costs at portfolio firms
Finastra isn’t the only company being refinanced. Vista has recently tapped the syndicated loan market for several of its other portfolio companies, including KnowBe4 Inc., Avalara Inc., and Duck Creek Technologies Inc. These companies, many of which Vista acquired within the last two years, have all seen meaningful interest cost reductions by replacing pricier private loans with more favorable public debt options.
The refinancing wave follows Vista’s full exit from Cvent, an event software company it acquired in 2016 for $1.7 billion. In 2023, Blackstone took Cvent private in a $4.6 billion deal, though Vista kept a preferred equity stake. That remaining interest has now been sold to Blackstone for $1.3 billion, officially ending Vista’s nearly decade-long involvement with the company and returning more capital to its investors.
Robert Smith builds $100 billion empire
Under Robert F. Smith, Vista has grown from a $3.5 billion fund in 2012 to a private equity giant managing over $100 billion in assets. The firm has backed more than 85 enterprise software companies and completed over 600 transactions valued at a combined $320 billion.
Smith, who Bloomberg lists as America’s second-richest Black billionaire with a net worth of $11.1 billion, is known for staying deeply involved with portfolio companies and focusing on careful, long-term growth. Earlier this year, Vista raised $5.6 billion to deepen its investment in Cloud Software Group, the parent company of Citrix and Tibco. The deal, one of the largest continuation fund transactions to date, combined $2.7 billion in new funding with $2.2 billion from Vista’s existing flagship funds.
