Sixth Street Seeks $3 Billion for Fund to Pursue Growth Deals

Sixth Street is seeking to raise at least $3 billion for its second fund targeting fast-growing companies, the latest move to pursue a broader lineup of deals after splitting from TPG.

The firm gathered $2.2 billion in 2019 for its debut growth fund, exceeding the initial target. Like its predecessor, the latest money pool will invest in equity and debt deals in industries ranging from software to financial services, according to a person with knowledge of the matter.

Alternative asset managers are increasingly focusing on fast-growing sectors including technology and health care as investors search for yield. The value of growth-equity deals reached a record $62.5 billion last year, according to data compiled by PitchBook. General Atlantic is eyeing $5 billion for its fourth such fund and Blackstone Inc. earlier this year amassed $4.5 billion for a similar pool. 

A spokesman for Sixth Street declined the comment. The San Francisco-based firm manages more than $50 billion and was co-founded by Alan Waxman, a former Goldman Sachs Group Inc. partner. 

Sixth Street has invested more than $5 billion in growth-oriented deals since its founding in 2009, according to the firm’s website. The unit focused on such transactions is run by Robert “Bo” Stanley and Mike McGinn and has backed companies including Spotify Technology and Airbnb Inc. 

The firm is also ramping up in health-care tech with recent equity investments in MDLive Inc. and Datavant Inc., which merged with Ciox Health in June. Sixth Street hired R. Martin Chavez, a one-time force behind Goldman’s trading and tech architecture who holds a Ph.D. in medical-information sciences.

Sixth Street ended an 11-year partnership with TPG last May, which limited both from expanding in certain overlapping areas.

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