Lightspeed Venture Partners has hired Elliott Management’s Isaac Kim to lead an expansion into technology-focused buyout investments, as first reported by Bloomberg.
Kim is a Menlo Park-based senior managing director with a nearly nine-year tenure at Paul Singer’s firm. Following his departure, Kim is completing a period of ‘gardening leave’ before formally starting with Lightspeed.
While Elliott is best known for its public activist campaigns, much of Kim’s work focused on buyout-oriented transactions, often in partnership with other sponsors. Notable deals include Elliott’s $16.5 billion Citrix take-private with Vista Equity Partners and its $16 billion acquisition of Nielsen alongside Brookfield.
Kim also held a seat on Athenahealth’s board, acquired by Elliott and Veritas Capital for $5.7 billion after a contentious activist campaign. In a post-mortem conversation with The New Yorker, Athenahealth’s founder and then-CEO Jonathan Bush described his research after Elliott’s approach as akin to “Googling this thing on your arm and it says, ‘You’re going to die.’”
Media coverage of details from Bush’s divorce a decade earlier appeared shortly after Elliott’s first public bid for Athena. Elliott denies involvement, though Bush and his ex-wife Sarah Selden believe the timing was not coincidental.
“You want Jonathan out as a CEO and you can’t find enough on him in the workplace, which is the only thing that should be relevant, so you dig this out—something that had nothing to do with work, and plaster it all over the tabloids?” said Selden. “I felt like our family was used for financial gain … we were a pawn.”
Lightspeed’s Private Equity Launch
Lightspeed’s approach is likely to be decidedly more tame—perhaps more closely aligning with the first nine years of Kim’s investment career, when he focused on software deals with Golden Gate Capital.
Lightspeed has not yet announced a dedicated buyout fund or publicly outlined its plans for more mature investments. The strategy does, however, mirror moves made in recent years by other early-stage firms looking to move beyond their core competency. Obvious benefits include an expansion of assets under management and some diversification away from potentially cyclical venture investing.Such moves typically lead to growth-oriented buyout strategies, also known as ‘growth buyout.’ Target industries and verticals generally match firms’ existing early-stage efforts.
In 2022, Bessemer Venture Partners raised $780 million for a new platform known as BVP Forge, a growth-oriented buyout strategy targeting acquisitions with an enterprise value of up to $300 million.
Later that year, General Atlantic hired veteran Silver Lake investor Jonathan Durham to lead its own technology buyouts group. The firm has since acquired infrastructure investor Actis and credit platform Iron Park Capital Partners, possibly in preparation for an upcoming IPO (for which it confidentially filed in December 2023).
While late-stage expansions may be gaining in popularity, it’s not an entirely new occurrence. Industry Ventures raised a dedicated tech buyout fund in 2020, and Frazier Healthcare Partners raised its first healthcare growth buyout fund in 2016.