LP Profile: Access Capital Partners

Founded in 1998, France-based Access Capital Partners (ACP) has historically focused on the European lower-mid-cap buyout segment via dedicated funds-of-funds and mandates. Although it has diversified its strategy in recent years, ACP still saw plenty of action from its core market in 2015.

"We raised close to €1bn for our buyout strategy last year, including €644m for our latest fund-of-funds in May and a €200m mandate for a large German institutional investor in the first quarter," says Poggioli. ACP's sixth fund-of-funds, Access Capital Fund VI Growth Buy-out Europe, exceeded its initial €400m target at final close. Insurance companies were by far the largest contributor to ACP VI, with 60% of all commitments. An additional 30% came from pension funds, with asset managers, family offices and foundations supplying the remaining 10%. Backers of Access's previous vehicles contributed three quarters of the commitments, unquote" reported at the time of the final close.

In addition, the firm launched its first co-investment fund, Access Co-investment Fund Buy-out Europe, in the second half of 2014, reaching a first close on €70m in November that year. The vehicle has so far raised €180m, beyond its initial target of €150m. ACP is expecting to reach a final close in excess of €200m in the coming months.

Distributions significantly exceeded our forecasts at the beginning of the year, also due to the fact that these exits were completed at valuation multiples higher than their book values" – Phillipe Poggioli, ACP

As far as the underlying investments are concerned, 2015 was firmly geared towards liquidity for ACP. "We have received more distributions than expected following a large number of exits. This significantly exceeded our forecasts at the beginning of the year, also due to the fact that these exits were completed at valuation multiples higher than their book values," says Poggioli.

On the deployment side, last year was very active for ACP with regards to both primary and secondary investments, Poggioli adds. The firm made a dozen primary fund investments, deploying €35-40m on average. On the secondaries side, Poggioli notes that the market remains difficult on the buy-side with plenty of liquidity around, but ACP nevertheless managed to score two large deals, deploying €300m in total.

Small is beautiful
Despite having raised increasingly larger funds and mandates, ACP's commitment to Europe's lower-mid-cap buyout segment has not changed – if anything, the firm has refocused on smaller funds and lower enterprise values. Underlying buyout investments across the portfolio have an average value of €60m.

"We are very conscious of mitigating the price inflation we are currently seeing in the mid-market. There is a lot of competition, the whole segment is very intermediated, and therefore we are seeing high prices and significant leverage," says Poggioli. "We are aiming for smaller deals, with a strong primary aspect and moderate debt levels. This is where we feel growth strategies and operational improvement can yield the best results."

In terms of geographical preference, ACP favours the north of Europe, with its main markets being the UK, DACH, and the Benelux and Nordic regions, as well as France. The firm has a small exposure to the Italian and Spanish markets, but as of now is still not keen on central and eastern Europe. Sector-wise, ACP adopts a generalist approach but is increasingly conscious of the importance of the "digital economy" trend to the underlying portfolio of European private equity assets.

With ACP IV currently invested at around 60%, ACP will look to launch its seventh generation fund-of-funds towards Q4 2016

New fund on the horizon
With the 2013-vintage ACP VI vehicle currently invested at around 60%, the firm will look to launch its seventh generation fund-of-funds towards Q4 this year, for a potential closing in 2017. This will add to the other vehicles launched in the past 18 months with the aim of diversifying ACP's offering.

In October 2014, ACP held a €56m first close for its second-generation private debt fund, which targets direct debt co-investments supplemented by primary and secondary commitments to private debt and mezzanine funds. The vehicle has a target of €150m.

ACP also started raising its first infrastructure fund-of-funds, Access Capital Fund Infrastructure, which reached a first close on €130m at the end of 2015, en route to a €250m target. Unlike the private debt vehicle, which according to Poggioli features a higher proportion of new investors, demand for the infrastructure product was largely driven by existing LPs. Last year also saw ACP secure a €100m mandate to co-invest in infrastructure assets, adding to its expansion within that strategy.

Although ACP has raised a number of co-mingled funds in the past two years, mandates are in fact a large part of the firm's activity. These now represent around 50% of ACP's €6.5bn in assets under management. These bespoke investment programmes are usually run on behalf of large institutional clients, says Poggioli: "Clients from Germany, the Nordic countries, the UK, the US, Benelux and France have historically been our main point of focus. Germany in particular is very important for us as we have around 30 clients there. But the UK has become increasingly active for us in the past year, and we have secured new commitments from local authority pension funds in this region."

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