Access holds EUR 375m first close for ninth flagship fund

Access Capital Fund IX Growth Buy-Out Europe (ACF IX GBO) has a EUR 800m target. The fund was launched in September 2021 with the expectation that its EUR 814m predecessor fund, ACF VIII GBO, would be fully deployed by the end of Q1 2022, managing partner Philippe Poggioli told Unquote.

In addition to its funds, ACP has single-client mandates with institutions including insurance companies and pension funds, which double the amount of capital the firm can deploy, Poggioli noted.

“We don’t expect the LP base to be significantly different for this fund,” Poggioli told Unquote. “There is still a lot of re-up potential from our existing LPs – this year is a very busy year, but we expect a ramp-up towards the end of the year. We will make a significant push for our final close with our LPs’ 2023 allocations and will likely close the fund in H1 2023.”

ACP intends to spend a significant amount of time engaging with potential new LPs for its flagship fund in the coming months, according to Poggioli. “The challenge in this market from a fundraising point of view is to engage with new institutional clients,” he said. “We have a strong re-up rate in our fund, but distance fundraising makes it slightly more difficult to engage with new clients. The new normal is not there yet in terms of digital marketing. The real challenge ahead is to enlarge our client base and talk to new people, and this is what we are concentrating on between now and the end of the fundraising.”

Investors
The fund’s commitments so far come from existing investors, according to a statement. At its first close, ACF IX GBO’s LP base is 90% institutional investors, plus one family office, Poggioli told Unquote. Two-thirds of this are insurance companies, with one-third made up of pension funds. Germany, France and the UK are the largest geographies, he added.

LPs in Access Capital Partners’ previous funds include Europa Lebensversicherung and Teeside Pension fund, according to Unquote Data.

Investments
ACF IX GBO will allocate around 60% of its capital to primary fund commitments for European small-cap buyout funds. The vehicle will typically commit to funds with a volume of up to EUR 500m, with an average of EUR 200m, Poggioli said. ACF IX GBO will make 15-20 primary fund investments with average commitments of EUR 60m-EUR 70m (including capital from the GP’s single-client mandates).

“Our strategy is supported by a clear increase in the performance of our funds over the past four generations,” Poggioli told Unquote. “We used to have a mix of mid-cap and small-cap funds, but since Fund VI, we have invested exclusively in small-cap funds. On average, we hold 30% of the funds in which we invest, so we are typically the largest LP. This gives us a very strong brand among GPs in the small-cap space as not that many people do this with our firepower, and our investors also see that we can do something that they can’t, since the funds are too small for them and often the market is too complex.”

In addition to primary fund deals, ACF IX GBO expects to commit 40% of its capital to secondaries deals in the small-cap segment. “We do LP stakes for small portfolios with one to three fund positions,” Poggioli said. “Last year, we did a lot of GP-leds, but there could be a wave of LP stakes this year. Both markets interest us: you get higher multiples for GP-leds but with longer holding periods, whereas LP stakes are typically in mature funds with liquidity coming quicker, so they generate higher IRR.”

In an extremely competitive fundraising market, Access Capital Partners also plans to continue its track record of backing emerging managers. “We are very keen supporters of emerging managers in Europe, so there is always a portion of our funds dedicated to this,” Poggioli told Unquote.

“Around 80% of the cases we see are spin-offs, where people have been able to demonstrate their capabilities in their previous larger setup,” Poggioli said of the GP’s investments in funds run by emerging managers. “The pipeline they come with is also key – we don’t invest in a black box, we want a pipeline that we can due diligence. We look for a concentrated portfolio of four to eight deals. Most of the time we facilitate the first close, but we need to see a pipeline that has a high probability of happening.”
Poggioli added: “Besides emerging managers, our sweet spot is typically generations two and three and we’re not afraid to make up 70%-80% of a fund.”

According to Unquote Data, ACP has previously committed to funds including Growth Capital Partners Fund V and Finexx Fund II. The GP was also an early backer of funds raised by GPs including Synova, Palatine and Stirling Square, according to Unquote Data.

People
Access Capital Partners – Agnès Nahum, Philippe Poggioli (managing partners).

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