Crosslake Continues Growth with New Continuation Fund

Crosslake, a prominent technology advisory firm, is set to accelerate its expansion following the successful closure of a single-asset continuation vehicle. This strategic move, orchestrated by its existing sponsor Falfurrias Management Partners, brings in Leonard Green & Partners' Sage Fund as a key investor. The transaction is designed to provide liquidity to certain prior investors while injecting fresh capital to fuel Crosslake's ambitious growth trajectory, including potential strategic acquisitions and platform enhancements.

The continuation fund structure underscores the market's confidence in Crosslake's established position as a critical technology partner for private equity firms and their portfolio companies. Since its inception in 2010, the firm has cultivated a reputation for its data-driven approach, leveraging proprietary tools and deep practitioner expertise to guide investment decisions and drive value creation across the entire investment lifecycle. This model has become increasingly vital in today's tech-centric business environment, where effective technology strategy is paramount.

Falfurrias Management Partners, which initially backed Crosslake, will continue its significant involvement as a substantial investor through the new vehicle. This continuity ensures that the company benefits from the established relationship and operational support that has been instrumental in its development. Under Falfurrias' stewardship, Crosslake has notably broadened its service offerings, particularly in high-demand areas such as AI and data analytics, product strategy, engineering, cybersecurity, and carve-out/integration services, which now constitute a significant portion of its business.

The involvement of Leonard Green & Partners, specifically through its Sage Fund, highlights Crosslake's status as a "crown jewel" asset. The Sage Fund is specifically designed to invest in leading, market-critical businesses held by other private equity sponsors. This partnership signals a shared long-term vision and a commitment to supporting Crosslake's management team, led by CEO Barr Blanton, as they pursue further strategic initiatives and market penetration. David Fox and Garrett Hall, Co-Heads of Leonard Green’s Sage strategy, expressed enthusiasm for the collaboration, emphasizing Crosslake's alignment with the fund's investment thesis.

Barr Blanton, who will also assume the role of Chairman, commented on the transaction, stating, \"This transaction reflects the strength of Crosslake’s platform, differentiated value proposition, and exceptional team.\" He further acknowledged the crucial role of Falfurrias' ongoing support and welcomed Leonard Green's Sage Fund as a new strategic partner for the company's next phase of expansion. The transaction also includes the addition of Cam Dyer, a Falfurrias Partner, to Crosslake's board of directors, alongside existing board members and an observer from LGP.

This deal structure is becoming increasingly prevalent in the private equity space as sponsors seek to extend their holding periods for high-performing assets while providing liquidity to earlier investors. The continuation fund market has seen substantial growth, reflecting its utility in managing portfolio company lifecycles and facilitating continued investment in promising businesses. For Crosslake, this means enhanced resources to capitalize on market opportunities within the rapidly evolving technology advisory sector, estimated to be a multi-billion dollar market with strong projected growth driven by digital transformation initiatives across industries.