Private Equity Firm Silver Lake Got Rich Off Tech. Now It’s Moving Beyond It.

At the height of the dot-com bubble, Silver Lake Partners arrived in Silicon Valley with a radical thesis. Technology companies, it hypothesized, finally had sufficient physical assets and cash flows to benefit from the type of private-equity financial engineering that previously had applied mostly to the industrial economy.

Before Silver Lake, the assumption was that a tech company’s most valuable assets walked out the door each night. As such, loading up on debt wasn’t an option. Tech companies were either fabulously overvalued by traditional metrics—because their promise was so great—or relegated to zombie valuations and considered unsalvageable.

Silver Lake, and later a bevy of competitors, changed all that by winning bets on the likes of Seagate, a disk drive maker, Skype, Nasdaq, and more recently, Dell. The firm took off when the dot-com bust wrecked the businesses, but not the prospects, of legitimate technology companies.

The Menlo Park, Calif., and New York firm is in the news because it has named two co-CEOs from its second-generation leadership team, Egon Durban and Greg Mondre. It is also raising yet more money. It didn’t give interviews Monday, but gave generous behind-the-scenes assistance for an authoritative Wall Street Journal article. The firm manages an astounding $43 billion. Not bad for a niche fund that started with $2.3 billion.

The line in the Journal article that caught my eye: Silver Lake is investing in “growing companies that either focus on technology or are going through a technology-related evolution.” The emphasis on the last bit is mine, and it’s the crucial part because technology-related evolutions are highly subjective. Silver Lake is a major investor in Endeavor, an amalgamation of the William Morris and IMG talent and sports agencies, and a large collection of acquisitions and other investments. Endeavor called off an IPO earlier this year and its debt exceeds its annual revenues. Last week, Silver Lake bought into the parent of Manchester City, the English football club. Tech may be a component of both of these companies. But they are in the talent and soccer businesses, respectively. Full stop.

The point is that while all private-equity firms have themes, Silver Lake is creeping beyond the mission that served it well for its first 20 years. Tech used to be special. Now it’s integral to the economy. Which makes it just a little less special.

Adam Lashinsky

Twitter: @adamlashinsky


This edition of Data Sheet was curated by Robert Hackett.


Take a picture, it'll last longer. With antitrust regulators breathing down its neck, Facebook is testing a new tool that will allow users to transfer their photos and videos to Google Photos. The feature anticipates what some proposed legislation is calling data portability. The media giant is running an initial pilot in Ireland and said it plans to expand access worldwide in the first half of 2020

Tell me what you want to hear. Just before Thanksgiving, Facebook released a chatbot called "Liam bot" that provides workers with answers to difficult questions about their employer. Fed with scripts from Facebook's public relations department, the tool was designed to address thorny issues from friends and family, such as accusations that Facebook disrupted American democracy or breaches people's privacy. 

The everything cloud. Amazon is finally getting in on quantum computing after rivals IBM and Google claimed an early lead. The retail giant's cloud division, Amazon Web Services, will let customers remotely access quantum computers through partnerships with three companies, D-Wave Systems, IonQ, and Rigetti Computing. Microsoft announced a similar service based on tech provided by Honeywell, IonQ, and startup QCI last month.

An Apple a day. Two JPMorgan analysts predict that Apple will shake up its iPhone debut schedule starting in 2021. Apple typically releases three iPhone models from September to October. Based on supply chain checks, the analysts expect Apple to start introducing two models in the first half of the year and two models in the second half of the year, smoothing sales seasonality and helping the company compete with rival releases.

We'll always have Paris. While the United States pulls out of the Paris Accords, more than 70 chief executives have reaffirmed their commitment to the international agreement designed to tackle the climate crisis. Signers include Apple CEO Tim Cook, Microsoft CEO Satya Nadella, Google CEO Sundar Pichai, and Tesla CEO Elon Musk.


At the advisement of a friend, I recently picked up the video game The Last of Us, a nail-biting zombie romp. (If you can stomach the horror genre, I recommend it.) Evan Wells, the president of Naughty Dog, a Sony-owned studio that developed the game and produced other hits such as Crash Bandicoot and Uncharted, recently spoke to the Verge about how 3D graphics changed his industry. 

There’s an old commercial from the 1990s that always stuck with Evan Wells. In it, a bottle of Listerine swings through a jungle on a vine, Tarzan-style, signifying the arrival of an exciting new flavor of mouthwash. The entire thing was built using computer-generated visuals that, today, look simple and dated. But it was a huge moment for Wells.


Apple has officially removed the bio for Jony Ive, its longtime chief designer, from its executive team webpage...Carolina Dybeck Happe, currently chief financial officer of Danish shipping giant A.P. Moeller-Maersk, is joining General Electric as its finance chief...New York City is looking to hire an "algorithms management and policy officer" in the Mayor's office...Jonathan Biller, the former chief legal officer of biotech firm Celgene, recently acquired by Bristol-Meyers Squibb for $74 billion, has a new gig as legal chief for biopharmaceutical firm Agios Pharmaceutical...Christina Miller, president of WarnerMedia's Cartoon Network, Adult Swim, and Turner Classic Movies, is set to depart at year-end...On January 1st, Finnish telecom giant Nokia is eliminating the role of chief operating officer, currently held by Joerg Erlemeier...Lee Se-dol, grandmaster of the South Korean game Go, has announced his retirement a few years after losing to Google's DeepMind A.I. 


Cyber Monday’s Best Deals for 2019 by Chris Morris

Why Thinner Black Friday Weekend Crowds Are No Cause for Alarm for Retail by Phil Wahba

Amazon and Walmart Thought India Would Be Their Next Giant Market. India’s Shopkeepers Would Like to Disagree by Ari Altstedter

T-Mobile Turns On 5G: What You Need to Know by Aaron Pressman

Europe Is Terrified of Digital Currencies in the U.S. and China—But Can’t Manage to Develop Its Own by Geoffrey Smith

Amazon’s Web by Alan Murray

When Stocks Are So Expensive, Even Facebook and Warren Buffett Won’t Pay by Jen Wieczner


How can you get someone with an opposing political view to hear your side? One tactic: Appeal to their particular set of values, social scientists say. Whereas liberals tend to prize fairness, equality, and protecting the vulnerable, many conservatives favor loyalty, morality, and respect for authority, Vox writes. Reframe your argument to suit the other person's perspective.

(Perhaps we should have shared this before the Thanksgiving holiday.)

Robert Hackett

On Twitter: @rhhackett


If You Like This Email...

Share today’s Data Sheet with a friend.

Did someone share this with you? Sign up here. For previous editions, click here.

For even more, check out Term Sheet, Fortune's daily newsletter on deals and dealmakers. Sign up here. 

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.

Read More

CEO DailyCFO DailyBroadsheetData SheetTerm Sheet