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THE WALL STREET JOURNAL.
WSJ Blogs
Trends and
insight from Dow Jones LBO Wire and Private Equity Analyst
September
27, 2013, 12:27 PM
Silver Lake
Focuses on ‘Second or Third Derivatives’ of Tech Trends
Silver Lake, the buyout shop that is poised to take
Dell Inc. private, isn’t necessarily looking to invest in the next big
thing in technology.
Instead, the Menlo Park, Calif., firm is focusing on the “second or third
derivatives” of major trends in the industry, said Managing Director Mike
Bingle, speaking Friday during the
Dow Jones Private Equity Analyst Conference in New York.
Mr.
Bingle said on the outset of the interview that he is restricted in his
comments about Dell. He did say, however, that “we’re fired up” about the
transaction. “It’s going to be a good investment for us,” he predicted.
The
executive, one of Silver Lake’s “four amigos” or four managing directors
including the lead Dell deal partner Egon Durban, said the firm naturally
keeps a close tab on all major tech trends such as cloud-computing, mobile,
social media and big data. But the firm in general stays away from investing
directly in companies on the front lines of those trends.
“For
a firm of our scale, it’s very difficult for us to invest in a pure-play
cloud-computing company,” said Mr. Bingle. “[Instead,] we focus on the
second and third derivatives of the trends.”
He
cited
Seagate TechnologySTX
PLC, a disc drive company Silver Lake invested in 1999, as an example. At
the time, the Internet resolution was in full swing, but instead of
investing in a company directly related to the Internet, the
technology-focused firm made a bet on Seagate, predicting that demand for
data storage would rise given the cyber traffic, he said.
Silver Lake focuses on “microtrends that we can understand and are able to
influence,” Mr. Bingle added.
Write to Shasha Dai at shasha.dai@wsj.com
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