Veritas Capital’s blockbuster $14.4 billion fundraising round for its Fund IX stands out for its overwhelming success amidst a challenging environment for private equity firms to raise money.
The firm announced on Sept. 10 that it raised $14.4 billion in capital commitments for its ninth fund, which exceeded its initial target of $13 billion. But private equity companies have struggled to raise capital despite extraordinary enticements to attract new cash during a sector-wide contraction, according to the Financial Times.
In turn, private equity firms raised only $592 billion in the year ending in June, the lowest amount in seven years. This came even as companies offered sweeteners such as management fee reductions and discounts to investors who committed quickly and early to new funds.
The economic climate in the U.S. has caused private equity fundraising to fall from record levels coming out of the Covid-19 pandemic. High interest rates and reduced dealmaking have resulted in private equity companies being unable to sell trillions of dollars in aging investments, as investors now refuse to back funds. Private equity fundraising is down by nearly 33 percent from its peak in 2021.
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How Big Is Veritas Capital?
Veritas Capital has more than $50 billion in assets, Buyouts reported. It also holds roughly 18 companies which combine to provide annual revenue of about $25 billion and employ more than 110,000 people, according to the Wall Street Journal. This is all under management by Ramzi Musallam, the company’s CEO and managing partner and a 10-time recipient of the prestigious Wash100 Award.
“In one of the most challenging fundraising environments in recent memory, strong demand for Fund IX is a clear endorsement of our strategy and platform,” Musallam said. “As technology increasingly defines the future of national security, advances healthcare delivery, and drives the broader economy, this Fund empowers us to expand our impact, seize new opportunities, and continue fueling innovation where it matters most.”
Fund IX will make control equity investments in large and upper mid-market companies. The fund targets organizations that provide services and products to the federal government with values between $500 million and $5 billion.
What Does Veritas Capital Do?
Veritas Capital strategizes in acquiring companies in heavily regulated industries such as education and aerospace and defense. The firm in 2024 acquired the digital banking division of NCR Voyix, which develops digital and cloud-based commerce services, for $2.5 billion.
Veritas Capital has become well-known for a corporate “carve-out” strategy. This is where it buys units of larger companies and then broadens them as independent operations, such as with the NCR Voyix deal. It often uses its own money to back larger buys that are usually valued at much more than $1 billion.
The firm is very active in the government space. Veritas in November 2023 sold Guidehouse, a leading provider of consulting services to both the commercial market and public sector, to Bain Capital for $5.3 billion. Guidehouse is led by CEO Scott McIntyre, an eight-time Wash100 Award winner and is also an example of the carve-out strategy—it was once the public sector business of PwC.
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