Accel-KKR quietly raised its debut evergreen fund targeting investments in small-cap tech-related businesses, almost entirely in the pandemic downturn, the firm is expected to announce later today.
Accel-KKR Emerging Buyout Partners closed on its hard cap of $640 million, the firm is expected to announce. That total includes $460 million in LP commitments and a $180 million GP commitment, according to the planned news release. The fund had initially been targeting $300 million, Buyouts previously reported.
The firm joins the likes of Vista Equity Partners and Leonard Green in raising capital to target smaller opportunities out of range for the larger funds.
The firm, based in Menlo Park, attracted some new limited partners into the fold with the new fund, the firm said in the planned release. Emerging Buyout Partners I is designed with an evergreen structure, Buyouts previously reported. Evergreen funds periodically open for fundraising and serve as a pool of perpetual capital.
Emerging Buyout Partners is led by Phil Cunningham, who has a focus on emerging growth companies. Cunningham joined Accel-KKR in 2017 from Advicent Solutions, where he was chief executive officer. He sits on the boards of ClickDimensions, FM:Systems, Insurance Technologies Corp, Salsa Labs and Siigo, according to the firm’s website.
The small-cap fund has three companies so far: Blue Mountain Quality Resources, an enterprise asset management services business for life sciences companies; Cloud9 Software, a cloud-based practice management and clinical care software for the orthodontic and pediatric dentistry industries; and InSight Mobile Data & Rhino Fleeting Tracking.
Accel-KKR closed its sixth flagship fund last year on its $2.7 billion hard cap, with $150 million from the GP.
Accel-KKR was formed in 2000 as a partnership between KKR and venture capital shop Accel Partners. By the mid-2000s, Accel-KKR was operating as an independent entity. The firm is led by Tom Barnds and Robert Palumbo.
Other established managers that have raised small-cap funds include Vista Equity Partners, which closed its debut Endeavor fund in 2017 on $560 million. Leonard Green raised its first small-cap fund, called Jade, last year on $2.75 billion.