GIC sells US$300m Vista Equity stake amid founder's tax scandal, likely incurring loss
Singapore's sovereign wealth fund, GIC, has sold its stake in Vista Equity Partners, valued at about US$300 million -- likely to result in a loss of investment -- amid a tax scandal involving the firm's founder, Robert Smith.
The Financial Times (FT) has reported that Singapore's sovereign wealth fund, GIC, has parted ways with Vista Equity Partners, selling its stake following a significant tax scandal involving the buyout firm's founder, Robert Smith.
GIC, a global heavyweight among investors, decided to dispose of its approximately US$300 million stake in Vista at a discount, consequently incurring a loss on its investment.
This move is seen as particularly unusual, as stakes in buyout funds are infrequently sold for reputational reasons.
The backdrop to this decision is the $140 million settlement in 2020 that Robert Smith, the billionaire founder of Vista, made with US authorities.
Smith and investor Robert T. Brockman were implicated in a tax evasion case. Smith entered into a non-prosecution agreement with the IRS, agreeing to pay US$139 million and to testify against Brockman.
The following month, Vista's president and co-founder, Brian Sheth, left the company. He maintained that his departure was unrelated to the tax situation.
Similarly, the UK's Wellcome Trust, a leading charitable donor and institutional investor, also withdrew its investment from Vista's funds.
In September 2019, Vista Equity Partners raised US$16 billion for their flagship fund, which stood as the largest technology-focused fund ever amassed by an independent private equity firm at that time.
In a recent letter to stakeholders, Smith expressed confidence, indicating that their new fund aims to exceed the amount raised previously.
When approached for comments by FT, all parties - GIC, Vista, and Wellcome Trust - declined to comment.
