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Dealmaking, talent attraction spur independent sponsor to raise debut pool

The firm's deal pipeline is stacked as the market dislocation motivates business owners to look for ways to cash out and to find ways to grow and digitize business practices.

Independent sponsor Access Holdings decided to move into the world of the funded to help facilitate the dealmaking process and to better attract talent into its ranks.

“Not having committed capital made completing each deal incrementally complicated. We could only pursue one strategy at a time because of concern of capital certainty by seller and partner,” Access Holdings’ founder and managing partner Kevin McAllister said in a statement to Buyouts.

“Additionally, scaling the team without the persistence of fee income made attracting talent from other traditional PE firms complicated. We believed that not having this talent could potentially limit our ability to drive value creation at the platform company level.

Access, a Baltimore shop focused on niche, service-based businesses, closed its debut fund on $340 million, sourced from 15 limited partners. That’s 36 percent above its $250 million target, the firm said in a statement this week.

The firm had raised about $200 million when, like many managers, it ran up against the pandemic lockdown. The market freeze forced Access Holdings to put fundraising on pause for a period of time, McAllister said.

Through the lockdown, the firm engaged daily with its portfolio companies and its investors as it implemented its crisis plan, McAllister said. The crisis plan included establishing crisis KPIs and increasing frequency of communications, as well as turning an immediate focus on employee safety.

“We developed and implemented a crisis response checklist and conducted executive forums to share insights and information,” McAllister said, as well as targeting cost management, preserving cash and capital management.

Access’s focus on essential services helped its portfolio companies perform through the downturn, McAllister said. Those services include pet cremation, end-of-life services, car washes, sports multimedia and life insurance.

“We believe proof of our strategies’ durability, company outperformance, continued strong additions to the team and the ability for LP’s to watch us manage throughout the crisis supported the successful completion of our fund raise,” McAllister said.

The firm’s deal pipeline is stacked as the market dislocation motivates business owners to look for ways to cash out and to find ways to grow and digitize business practices.

“The operational challenges from Covid and the need to accelerate the rate of innovation to meet new customer demand considerations has left many looking for partners who can support the digital development and evolution of their traditional businesses. It has also left many family business owners and entrepreneurs looking to take some chips off the table,” McAllister said.

Access Holdings deployed about $100 million from Fund I as of Dec. 31, 2020, McAllister said. The firm also raised about $200 million of co-investment capital that supported its first two platform companies in the fund: End of Life Services/Cremation and Express Car Wash.

The firm, formed in 2013, completed three pre-fund investments and 54 add-ons, raising about $280 million for the investments. “We believe that this made us one of the largest and most active independent sponsors in North America between Dec. 2014 and Dec. 2018, before choosing to raise our inaugural fund,” he said.

McAllister formerly worked at Sterling Partners and American Capital. He is joined by Steven Chang, Omar Rahman, Michael Rodgers and Andy Colmone.