Accel-KKR targets $500 mln for third growth fund

  • Fund III targets $500 mln
  • Has raised at least $155 mln
  • Prior fund closed on $350 mln in 2014

Accel-KKR, a technology-focused investment firm, attracted a slew of commitments from investors in recent weeks for its latest growth offering, which is targeting $500 million, according to an SEC filing and Buyouts research.

Accel-KKR Growth Capital Partners III has attracted at least $155 million in the past month across five pensions, Buyouts research found.

Merced County Employees Retirement System committed $5 million. Meanwhile, Orange County Employees Retirement System and the Metropolitan Government of Nashville & Davidson County Employee Benefit System have each approved $25 million in commitments.

But it is Los Angeles County Employees Retirement System and Texas County & District Retirement System who led the pack, with committed capital of $50 million apiece.

Founded in 2000 amid the dot-com bubble, Accel-KKR began as a partnership between KKR and the venture capital firm, Accel Partners. By the mid-2000s, Accel-KKR was operating as an independent entity.

Accel-KKR invests through its core buyout funds and its growth equity pools. The firm raised five core buyout funds, including the more than $1.3 billion Fund V, which closed in 2015.

Managing Director Tom Barnds said in past interviews that Accel-KKR acquired or invested in more than 125 companies since its inception, including software and technology-enabled businesses DataPipe, Opera Solutions and SciQuest. The firm manages about $4.2 billion across buyouts, growth capital and credit.

The prior growth fund closed on around $350 million in 2014. As recent as Sept. 2017, the second fund’s performance was lagging behind with a -3.85 percent internal rate of return and TVPI ratio of 0.95x. Fund I recorded an IRR of 19.5 percent for the same quarter.

Barnds manages the firm along with Roberto Palumbo, both of whom also oversaw Funds I and II.

Action Item: Read Accel-KKR’s Form ADV here: