Accel-KKR, a technology-focused private equity investment firm, has held the official close of its fifth buyout fund with USD1.3 billion in committed capital.
The fund, Accel-KKR Capital Partners V, will continue Accel-KKR's long-term focused strategy of investing in lower-middle market and middle-market software and IT-enabled services companies.
Accel-KKR says the fund received strong support from its investors in prior funds, as well as attracted a number of new investors.
Tom Barnds (pictured), Managing Director of Accel-KKR, says: "We are heartened by the support we received from our existing investors, and are quite pleased to welcome a number of new investors to the fund. The missions of our investors, who include leading academic institutions, medical research foundations, health care institutions, and corporate and government pensions, resonate deeply with the Accel-KKR team."
The firm formally went to market with Fund V in Spring 2015 and closed on its hard cap earlier this month. This brings Accel-KKR's total committed capital to USD4.0 billion across its current and previous funds.
The new fund includes a USD100 million commitment from the firm's general partners. "We believe in strong alignment of interest with our limited partners," commented Rob Palumbo, Managing Director of Accel-KKR. "One of the many ways we seek to achieve this alignment is by making very significant financial commitments to invest alongside of our limited partners." The USD100 million commitment represents the largest such general partner commitment in the firm's history and also makes the general partner the largest investor in the fund.
Accel-KKR invests through two different types of funds – its Buyout funds for majority ownership positions and its Growth Capital funds for minority ownership positions. Accel-KKR raised its second Growth Capital Fund in 2014 with USD350 million of committed capital. Fund V also follows the firm's fourth buyout fund, which it started investing out of in 2013 with USD800 million of commitments.
The firm has continued to expand its investment efforts outside of North America. In 2013, it opened a London office, and since 2013 the firm and its portfolio companies have acquired or invested in over eight technology companies in Europe. Accel-KKR has also expanded its investor base outside the United States, such that in Fund V over one third of the committed capital is from international investors. International investments continue to be an integral part of the firm's strategy going forward.
The close of Fund V also comes amidst a period of significant activity for Accel-KKR, in terms of new investments, add-on acquisitions by portfolio companies and realisations of investments.
