For a private equity firm that counts on government spending for the majority of its portfolio companies’ revenue, the Trump administration’s Department of Government Efficiency would seem to cast a shadow over its growth prospects. Veritas Capital CEO Ramzi Musallam insists the effect has been just the opposite, and his pitch has convinced investors.
Veritas closed its ninth flagship fund at $14.4 billion last week, among the largest funds raised by any firm in an otherwise bleak year for private equity fundraising. The fund brings Veritas’ total assets under management to more than $54 billion and gives it a new war chest to invest in technology companies in heavily-regulated industries like healthcare, defense, education, infrastructure and fintech.
Veritas’ portfolio companies generate $25 billion in annual revenue, with around 60% coming from government agencies and the rest via the enterprise market (the firm doesn’t invest in direct-to-consumer companies). Musallam says Veritas is focused on companies with “must-have” technology that reduces wasteful spending.
“This current administration is doing something that should have been done a long time ago, putting a spotlight on not only efficiency, but quality,” Musallam tells Forbes. “The thrust is, how do you utilize technology to drive costs down and to improve outcomes? That's the administration's objective, and that aligns perfectly with our objective.”
Some of the names in its portfolio today include Cotiviti, a healthcare data analytics business which KKR acquired a stake in last year at an $11 billion valuation, and Gainwell Technologies, which provides software to state Medicaid agencies and other public health programs across America. States will have to increasingly lean on technology to comply with new eligibility certification requirements in Trump’s One Big Beautiful Bill, including a requirement that states verify that certain Medicaid beneficiaries are working, volunteering or attending school each month. The 50 states already spent $34 billion in the 2023 fiscal year on Medicaid administration.
The bill is projected to cut about $1 trillion in Medicaid spending in the next 10 years, and the Commonwealth Fund, a private healthcare-focused foundation, estimates that 500,000 jobs could be lost in healthcare as a result of the cuts. But as workforces in pharmacies, hospitals and clinic offices shrink, software like Gainwell provides will likely become more crucial to fill the void.
Last year, Veritas also entered the fintech space with the acquisition of NCR Voyix’s cloud-based digital banking business for $2.45 billion. Veritas renamed the company Candescent, and it now provides banking software for more than 1,500 institutions. Musallam said his firm had looked at upwards of 100 investment opportunities in fintech before settling on this one and expects to remain active in the sector.
Veritas’ unique focus on where technology meets government and bureaucracy has proven fruitful. The firm ranks 10th out of 649 firms on this year’s HEC-Dow Jones large buyout performance rankings, an annual list compiled by HEC Paris Business School professor Oliver Gottschalg that assesses aggregate performance over a 10-year period. Oregon’s state pension fund documents reveal that Veritas’ sixth flagship fund has generated an impressive net IRR of 36% annually since its 2017 launch, while its seventh fund has returned 8.7% annually since 2020.
Since Musallam took over as CEO following founder Robert McKeon’s death in 2012, Veritas’ assets have ballooned from $2 billion to $54 billion. Musallam’s own net worth currently sits at an estimated $10.8 billion. The Jordanian immigrant remarked to Forbes in 2021 that the U.S. government is “the largest single investor in technology, bar none, by multiples of what the entire venture capital community invests.”
Veritas’ track record has persuaded its institutional investors to come back for more, even as many pensions and endowments are scaling back their private equity allocations. Musallam also says that for the first time a “meaningful” portion of the new fund came from family offices; soliciting from private wealth channels has become more commonplace for PE firms. An investment document for Arkansas’ teachers pension fund says Veritas’ fund will target profitable businesses with values between $500 million and $5 billion. The size will give it the capacity to co-invest with other firms to go after larger companies as well.
Private equity fundraising globally has fallen around 40% since its peak at $1.1 trillion in 2021, as firms are having more difficulty selling businesses and returning profits to investors. Veritas is one of a select few firms that have bucked that trend this year. Software buyout firm Thoma Bravo closed a $24 billion fund in June, the only U.S.-based fundraise larger than Veritas’ so far in 2025.
“What you’re going to see is a bifurcation in private equity, and investors are going to focus more and more on firms that can provide a repeatable playbook and allow for consistent top-quartile or top-decile returns,” predicts Musallam. “There will be more consolidation in the market as a result of that, and a lot of funds that exist today won't necessarily exist five years from now.”
In a world of haves and have-nots on Wall Street, Uncle Sam’s $6.8 trillion in annual spending gives Veritas an edge to emerge as one of the winners. The firm plans on getting an even bigger slice of that pie as more tasks get outsourced out of a shrunken federal workforce, giving the government contractors it owns an outsized role.