#Saudi PIF Is Among Investors Who Lost Money on Pluralsight Deal - Bloomberg

Saudi PIF Is Among Investors Who Lost Money on Pluralsight Deal - Bloomberg

Saudi Arabia’s sovereign wealth fund is one of the co-investors that lost money on Vista Equity Partners’ acquisition of Pluralsight Inc., according to people with knowledge of the matter.

A handful of Vista’s big clients — including the Public Investment Fund — directly joined the acquisition and contributed equity, the people said, asking not to be named discussing a private transaction. The exact size of PIF’s loss could not immediately be determined.

Vista acquired the educational-software company in 2021 and lost about $4 billion on the transaction along with its co-investors following a debt restructuring that wrapped up last week, Bloomberg News has reported.

The PIF didn’t respond to a request for comment. Vista and Pluralsight declined to comment.

The wipeout has created a painful situation for the limited partners that acquired the company directly with Vista. AustralianSuper, the country’s largest pension, is writing off A$1.1 billion ($750 million) on Pluralsight.

Typically, sovereign wealth funds, pensions and other large money managers diversify their exposure by investing in a private equity fund, which then buys a group of companies. But co-investing, when the money managers invest directly in an individual company alongside a private equity firm, provides a way to cut back on fees and put large sums to work quickly.

Gulf sovereign funds have increasingly been looking to get co-investment rights on deals as they seek better returns and want to boost their reputations as world-class asset managers. But if such investments sour, it leaves the limited partners — alongside the private equity firms — open to losses.

By late 2023, Pluralsight had started to stumble under pressure because of higher interest rates, increased competition and softening demand for its services, Bloomberg reported. Negotiations with the firm’s debt holders led Vista to give up the keys to the company to a group of private credit lenders led by Blue Owl Capital Inc.