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Goldman, GIC, Adams Street lead Accel-KKR 2008 fund revamp

  • Three assets remain in Fund III
  • Proposed deal is at premium over NAV
  • Firm raised $600 mln in 2008

Goldman Sachs and Government of Singapore’s sovereign fund (GIC) are leading the restructuring of Accel-KKR’s 2008 fund, two sources told Buyouts. Adams Street Partners is also a lead buyer on the deal, two sources said.

Pricing on the deal is at a premium over net asset value as of the first quarter, three sources said.

The proposed deal would move remaining assets in Fund III into a continuation vehicle that will be managed by Accel-KKR. Three companies remain in the fund: Infinisource, Paymentus and TrueCommerce, sources previously told Buyouts. Each company has annual revenue greater than $100 million, the sources said.

Accel-KKR closed Fund III on $600 million in 2008. The fund was generating a 3.4x gross multiple and a 30 percent internal rate of return as of Dec. 31, 2018, sources said.

Across its funds, Accel-KKR has reported an annualized 32 percent return over 18 years. Fund III still had about $500 million of remaining net asset value, sources told Buyouts in February.

Accel-KKR invests through its main buyout funds and its growth equity pools. Accel-KKR closed its most recent flagship Fund V on more than $1.3 billion in 2015. It was targeting $500 million for its third growth equity pool last year.

The firm, led by Tom Barnds and Robert Palumbo, was formed in 2000 as a partnership between Kohlberg Kravis Roberts and Accel Partners. Accel-KKR has operated independently over the past 15 years.

In separate transactions in April and October 2017, Goldman Sachs’s Petershill Group acquired a less-than 15 percent stake in Accel-KKR’s management company, according to the firm’s Form ADV.

As of Dec. 31, 2017, Accel-KKR managed about $3.7 billion, the Form ADV said.

Accel-KKR is among several high-profile GPs pursuing secondary deals. Others include Thomas H. Lee Partners, which is restructuring its sixth fund; Oaktree Capital Group, which is working with AlpInvest Partners and HarbourVest Partners on the restructuring of its 2009 special situations fund; and Milestone Partners, which is restructuring its third and fourth funds.

Spokespeople for Accel-KKR and Goldman declined to comment. GIC could not be reached for comment.

Action Item: Check out Accel-KKR’s Form ADV here: https://bit.ly/2OMZtPI

Update: This story was updated to include Adams Street as a buyer on the deal.