Accel-KKR, a private equity firm specializing in technology-focused investments, recently announced that it has secured $5.3 billion in two buyout funds for investment purposes. The funds, which were oversubscribed, will be used to invest in middle-market software and technology-enabled services companies.
The first fund, Accel-KKR Capital Partners VI, raised $3.3 billion and will focus on buyout and growth equity investments in North American software and technology-enabled services companies. The second fund, Accel-KKR Capital Partners VI (SMB), raised $2 billion and will focus on investments in smaller software and technology-enabled services companies.
According to Accel-KKR, the funds received strong support from both existing and new investors, including public and private pension funds, endowments, foundations, family offices, and sovereign wealth funds.
The firm’s co-founder and managing partner, Tom Barnds, said in a statement that the funds will allow Accel-KKR to continue its strategy of investing in “market-leading software and technology-enabled services companies with strong growth prospects and exceptional management teams.”
Accel-KKR has a long history of investing in technology-focused companies. Since its founding in 2000, the firm has invested in over 200 companies across North America, Europe, and Asia. Its portfolio includes companies such as SmartBear, a software testing and monitoring company; HighWire Press, a digital publishing platform for scholarly content; and Infinisource Benefit Services, a provider of employee benefits administration software.
The firm’s investment strategy is focused on partnering with management teams to help accelerate growth and drive operational improvements. It typically invests in companies with revenues between $20 million and $300 million.
Accel-KKR’s latest funds come at a time when private equity firms are flush with cash and looking for opportunities to invest. According to data from PitchBook, private equity firms raised a record $453 billion in 2020, despite the economic uncertainty caused by the COVID-19 pandemic.
The technology sector has been a particularly attractive area for private equity investment in recent years. According to PitchBook, technology-focused private equity funds raised $41.3 billion in 2020, up from $29.2 billion in 2019.
Accel-KKR’s latest funds are a testament to the continued interest in technology-focused investments and the firm’s ability to attract capital from a diverse group of investors. With $5.3 billion in new funds at its disposal, Accel-KKR is well-positioned to continue its track record of investing in successful technology companies.
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