Accel-KKR Raises Two Buyout Funds Totaling $5.3B

Private equity firms continue to bulk up as many think current trends in the market may create buyout opportunities in the second half of the year.

Technology-focused Accel-KKR is the latest, announcing it has closed on $5.3 billion of new capital commitments for both its Capital Partners VII LP and Emerging Buyout Partners II LP funds.

The Menlo Park, California-based private equity firm has made more than 350 investments in its two-decade-plus history. It invests in tech companies through a series of different funds and strategies including buyout, emerging buyout, growth capital and credit. It now has $19 billion in cumulative capital commitments.

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Some of the firm’s most recent investments include: Australia-based workforce management software developer Humanforce; Waltham, Massachusetts-based compensation data provider Salary.com; and U.K-.based processor of rental payments PayProp.

The new funds

The Capital Partners VII LP closed with $4.4 billion of equity capital commitments and will continue the firm’s strategy of making majority buyout investments in lower-middle market and middle-market tech companies.

The Emerging Buyout Partners II closed with $920 million of equity capital commitments. That will enable Accel-KKR to invest in software and tech-enabled services companies — with a special focus on small-cap companies.

“In raising these two new funds, we will continue our long-term strategy of working in partnership with management teams of the companies in which we invest, aggressively supporting their growth objectives by providing capital and operational support to fuel accelerated organic and inorganic growth,” said Tom Barnds, co-managing partner at Accel-KKR, in a release.

As financing options decline for startups and share prices of publicly traded companies drop, many think the M&A market will heat up later in the year. That likely is especially true for private equity firms, as many have raised huge funds recently that could take advantage of bargains in the market.

Illustration: Dom Guzman