Sunstone Raises $925 Million Fund III

Sunstone Raises $925 Million Fund III

Sunstone's third fund is the largest it has raised and brings total committed limited partner capital to $1.7 billion

Sunstone Partners has closed its oversubscribed $925 million third fund, Sunstone Partners III LP, at its hard cap. Fund III is the firm’s largest fund to date and brings total committed limited partner capital to $1.7 billion.

Fund III received from support from Sunstone’s existing limited partners and new institutional investors, including endowments, foundations, family offices, fund-of-funds, and pension funds.

“We are incredibly grateful to our existing limited partners for their continued support and excited to welcome and work with our new investors,” said Gustavo Alberelli, a managing partner of Sunstone. “Their strong support is a validation of our investment strategy, overall performance, and the team we are building at Sunstone.”

Like its earlier funds, Sunstone will make growth equity and growth buyout investments of $50 million to $150 million in profitable technology-enabled services and software companies that, typically, are founder-owned. Sectors of specific interest include cloud services, healthcare IT, cybersecurity and marketing technology.

Since its founding in 2015, Sunstone has made 39 investments, including 13 platforms and 26 add-ons. The firm has achieved full or partial exits 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 digital user experiences, which was acquired by Thoma Bravo in 2022; and NETSPI, a provider of cyber defense software and services, which announced its acquisition by KKR earlier this month.

“We have a thesis-based investment approach focused on partnering with exceptional founders to help them scale their businesses and accelerate their growth,” said Arneek Multani, a managing partner at Sunstone. “We look forward to continue adding value to the businesses we invest in by utilizing our sector expertise, providing operational resources to drive growth initiatives, and focusing on add-on acquisitions.”

“The growth that Sunstone has achieved is a testament to the hard work and commitment of our expanding team, currently 35 professionals,” said Mike Biggee, a managing partner at Sunstone. “We are excited about the opportunities that this new fund will provide to the members of our Sunstone team and portfolio companies.”

Sunstone Partners is headquartered in San Mateo, California.

© 2022 Private Equity Professional | October 14, 2022

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