David, welcome.
It's great to be here.
What's Vista's view on the current software market?
You still seeing opportunities to invest?
We are, we've been actually quite excited and the last 18
months I would say it was a tale of two markets.
At the larger end of the market, we've seen great opportunities
in the public market.
So our flagship fund, the first five transactions where I'll
take privates of public companies.
So we saw real value.
We saw the ability to buy some fantastic companies at what we
thought were appropriate prices.
I would say a year ago we were struggling a little bit in the
middle market.
The valuation expectations of sellers were really disconnected
from the environment that we're in.
But we've really seen that gap narrow.
And so I'd say our pipeline on the private side in the middle
market and lower middle market we've really seen start to pick
up and expand.
And you know it's a firm we have funds that really track every
part of the market.
So our middle market fund and our lower middle market fund I
think are seeing a lot more opportunities than they were
seeing 18 months ago where they thought we could buy really good
companies at more appropriate valuations than than what we
were seeing 18 months ago.
Within enterprise software, what developments are you
particularly keeping your eye on at the moment?
So for sure the biggest development right now is
generative AI and it's really going to have effects in
software across a number of different dimensions.
So you know one of the big impacts is going to be on the
actual operations of a software business.
So how code is written, how customer service is delivered,
there's significant opportunities to really change
the cost structure of a software business by the incorporation of
generative AI.
But even more than that is really on the product side.
Most of our companies are going to be infusing generative AI
features into their products, making them more sticky,
expanding their total addressable market, making them
more valuable to their customers.
And so I think it's going to really over the next three or
four years you're going to just see significant changes in how
people interact with software based on the enablement of
generative AI products.
And we've we've got some companies doing some really
exciting things.
More broadly, how is this defining success during market
slowdown?
Well, you know what's interesting for us is there's
obviously been an industry trend around the need for liquidity
and and a lot of the private equity industry, I think last
year they were down about 44% in terms of realizations or
distributions.
We as a firm we're actually up 48%.
So we had a very successful last 18 months in terms of exit
transactions and I think that's largely attributable to the fact
that we buy good companies and help them really be great
companies.
And when you build really strong operationally strong companies,
lots of people want to buy them.
And so you know we've had interesting exits where we sold
Apptio to IBM in a strategic transaction. Cvent was taken
private by Blackstone, so kind of a sponsor transaction.
Some of our public companies we've been you know selling in
secondary sales.
So it's really it's been interesting that we've I think
last year we generated a little over 8 1/2 billion of liquidity
through a whole variety of different transaction
structures.
So.
So I think, you know, we just can.
I think the world, there's no company that doesn't believe
they need more digitization, right?
Like the world is just becoming more and more digital.
Generative AI is obviously an accelerant of that.
And so because you know, our companies fundamentally help
industries digitize, there's just lots of strong tailwinds in
the industry generally.
David, thank you so much.
It's great to be here.
Thank you.