Accel-KKR announced the completion of fundraising for AKKR Strategic Capital LP, closing on over $2.2 billion of capital commitments. AKKR Strategic Capital will invest in a broad range of transactions primarily focused on the software industry in the secondary market, aligning with the firm’s long-standing focus and experience backing growing software and technology-enabled services companies.
Accel-KKR invested broadly in the secondary markets for over 15 years, utilizing capital primarily from its own balance sheet. And AKKR Strategic Capital will be Accel-KKR’s first fund dedicated to secondary investments utilizing outside capital, partially seeded with existing investments.
AKKR Strategic Capital will seek to lead investments in other sponsors’ continuation vehicles consisting of software assets, building on its current experience. And Accel-KKR made its first investment in this market, serving as sole lead investor in a continuation vehicle managed by LEA Partners, a DACH-headquartered private equity firm, to extend the duration of two high-quality software businesses in LEA’s portfolio with significant organic growth and M&A opportunities.
Along with investing in and leading third-party CVs, AKKR Strategic Capital can participate in future Accel-KKR CVs. And Accel-KKR has significant experience in the CV market through its own CVs, including:
— In 2022, the firm completed Accel-KKR Capital Partners CV IV, a $1.765 billion multi-asset continuation vehicle for Accel-KKR’s $875 million 2013 vintage technology buyout fund.
— In 2019, Accel-KKR completed Accel-KKR Capital Partners CV III, a $1.386 billion multi-asset continuation vehicle for its $600 million 2008 vintage technology buyout fund.
The investors in AKKR Strategic Capital feature a diverse group of limited partners including public plans, foundations, university endowments and non-profits. Many of these limited partners are active investors in the secondary markets.
The lead investor in AKKR Strategic Capital is Ardian, and other investors include StepStone Group, Adams Street Partners and CPP Investments. The General Partner and its affiliates have made an aggregate commitment of approximately 24% of the fund’s committed capital.
Accel-KKR has invested in or acquired 450+ technology companies globally since its founding in 2000, making it one of the most active private equity firms in the software and tech-enabled services sector. And these transactions have included acquisitions and recapitalizations of founder-owned or closely-held private companies; buyouts of divisions, subsidiaries and business units from private and public companies; and going-private transactions of public companies.
During its history, Accel-KKR has raised 18 funds across five fund families, including Buyout (for majority investments), Emerging Buyout (for smaller majority investments), Growth Capital (for minority investments), Credit (for debt investments) and Strategic Capital.
KEY QUOTES:
“The secondary market in private equity continues to experience significant growth, including accelerating growth in the GP-led continuation vehicle (CV) segment. Based on our own successful experience with CVs, as well as other opportunities that we expect to find more broadly within the Accel-KKR ecosystem, we believe our firm is well positioned to bring specialized software expertise to the secondary market.”
– Tom Barnds, Co-Managing Partner at Accel-KKR
“We are quite pleased to be able to expand our capital available for investment in the secondary market, and look forward to partnering with many of our investors in this fund who bring very complementary secondary experience to the table.”
– Rob Palumbo, Co-Managing Partner at Accel-KKR
