OceanSound banks $780 million for debut fund
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2 min read . Updated: 08 Feb 2022, 07:45 PM IST - Firm closes fund above initial $550 million goal, despite pausing marketing efforts during height of the pandemic
OceanSound Partners has raised $780 million for its first fund, overcoming initial setbacks from the coronavirus pandemic and a crowded fundraising market to exceed its $550 million goal.
The New York-based growth investor now has more than $1 billion to invest when factoring in capital available for co-investments from limited partners in OceanSound Partners Fund I LP, a person familiar with the offering said.
OceanSound is one of a small number of private-equity firms launched by a Latino. It was founded in 2018 by Managing Partner Joe Benavides, a former partner at Veritas Capital, Partner Ted Coons, who previously worked at late-stage venture-capital firm TCV, and Partner Jeff Kelly, a former principal at midmarket focused H.I.G. Capital.
Ariel Garcia joined OceanSound as a partner this year and was previously at Melville, N.Y.-based ChyronHego, which specializes in broadcast graphics creation, playout and real-time data visualization for news, weather, live television and sports production.
OceanSound targets investments in U.S.-based technology and technology-enabled services companies, particularly ones serving government clients. The firm began marketing its debut fund in the fourth quarter of 2019, WSJ Pro Private Equity previously reported.
After the coronavirus pandemic hit the U.S. in March 2020, however, OceanSound took a “hiatus" from fundraising and focused on investing money it had raised in an initial first closing of its fund that year, Mr. Benavides said.
OceanSound backed the recapitalization of Hollywood, Md.-based Smartronix LLC and Huntsville, Ala.-based Trident Technologies LLC, WSJ Pro Private Equity previously reported. They subsequently merged and acquired two more companies, and together rebranded as SMX last November.
OceanSound also invested in Bannockburn, Ill.-based Netrix LLC, which provides cloud infrastructure, collaboration, data and development services to small and midsize enterprise customers.
By the time OceanSound resumed fundraising, the firm was able to show prospective investors how progress from its early deals helped it stand apart from other private-equity firms, according to Mr. Benavides.
OceanSound typically invests $75 million to $300 million in companies with enterprise values between $150 million and $750 million, and focuses on companies selling products to other companies or through government contracting, according to its website.
“These companies sit at the intersection of government and technology," as regulation and government spending are increasing, Mr. Benavides said.
OceanSound also sees opportunities in the public sector because of its antiquated government technology infrastructure, and because government agencies find it difficult to attract younger workers, according to Mr. Benavides.
Less than 8% of the federal workforce is younger than 30, compared with 30% of employees at Nasdaq-100 index companies, according to Mr. Benevides.
“When you put all those things together…and marry them with threats of not just cybersecurity issues…it forces them [governments] to look outside for technology solutions," he said.
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This story has been published from a wire agency feed without modifications to the text
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