Silver Lake Management LLC, the biggest technology-focused buyout firm, stands to make more than five times its money in Alibaba Group Holding Ltd. after the Chinese e-commerce giant’s record-breaking initial public offering, a person familiar with the matter said.
Bloomberg News reports that Alibaba closed at $93.89 a share in its first trading day on the New York Stock Exchange after pricing its $21.8 billion IPO at $68, giving Silver Lake a paper gain of about $4.6 billion. The firm and its affiliates injected $825 million in Alibaba, including $447 million from Silver Lake’s third buyout fund in late 2011, said the person, who requested anonymity because the information is private.
Alibaba’s IPO, the biggest ever for a technology company, has proved to be a windfall for the company’s executives and backers such as Silver Lake, which manages $23 billion in assets. Founded in 1999 by Jim Davidson, Glenn Hutchins and David Roux, Silver Lake teamed with Dell Inc. founder Michael Dell last year in a $24.9 billion buyout of the computer maker. The firm completed raising its fourth buyout fund in 2013, gathering $10.3 billion.
Emily Levin, a spokeswoman for Menlo Park, California-based Silver Lake at public-relations firm Brunswick Group, declined to comment.
Private-equity firm General Atlantic LLC stands to make a larger multiple of its money. The firm invested about $75 million in Alibaba in November 2009, said a person with knowledge of the matter, after being introduced to the company the previous year. New York-based General Atlantic didn’t sell shares in the offering and now controls a stake valued at more than $2 billion, said the person, who requested anonymity to discuss private information.
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