Accel-KKR closes Fund III on $600m

The technology-focused affiliate of venture firm Accel Partners and mega-buyout firm Kohlberg Kravis Roberts has closed its third fund with commitments from all existing limited partners.

Accel-KKR, a technology-focused private equity firm founded in 2000 by Kohlberg Kravis Roberts and Accel Partners, has closed its third private equity fund on its hard cap of $600 million (€426 million).

The fund will begin its investment period “shortly”, the firm said in a statement. It was raised with a “limited marketing process” and without the use of a placement agent.

The marketing process lasted three months, excluding pre-marketing, according to a source familiar with the firm.

All limited partners from Fund II, which closed in 2006 on an undisclosed amount, committed to Fund III. The limited partners include university endowments, corporate pension plans, foundations, insurance companies, investment advisors, pension plans and family offices.

Partners from Accel and KKR are “significant personal investors” in the fund, according to a company spokesperson. Partners from the two firms are also represented on Accel-KKR's advisory board.

Founded in 2000, Menlo Park, California-based KKR-Accel specialises in making majority investments in mid-market technology companies with revenues between $15 million and $150 million. It has more than $1 billion in committed capital under management.

The firm has had a gross internal rate of return of more than 50 percent annually since 2002 when the current management team took control of the firm, according to the same source. The firm's three managing directors are: Tom Barnds, Ben Bisconti and Rob Palumbo.

Accel-KKR announced one deal in 2008, backing the launch of M2 Technology Partners, a private acquisition vehicle firm targeting enterprise software businesses. In 2007, the firm acquired a majority stake in iTradeNetwork, a provider of e-business solutions to the food industry and exited software company Saber Holdings in a sale to technology services company EDS.