Accel-KKR Managing Director Rob Palumbo declined to comment regarding any fund-raising activity, but he said that he feels the smaller fund size and focus on “mission critical” software and IT-enabled services sets the shop apart from its larger peers.
“Mission critical software is not a ‘nice to have,’” he said. “It’s a ‘gotta have.’”
Competition from Silver Lake Sumeru, in particular, is new. That fund was raised by vets at tech-buyout giant Silver Lake to do deals between $50 million and $150 million. Accel-KKR targets companies generating sales between $15 million and $150 million.
Accel-KKR has a recent exit to tout to prospective limited partners. In November 2007, the firm earned a blockbuster return on an investment from its second fund when it sold Saber Holdings Corp. to Electronic Data Service, earning 6.2x its investment. The complex deal managed to incorporate a carve-out, an add-on and a turnaround.
That big-money return could help the firm shake off the poor performance of its first fund. That pool, invested before the tech boom, generate a negative 0.2% IRR as of Sept. 30, according to the