Kohlberg Kravis Roberts has acquired a 24.9 percent stake in credit-oriented hedge fund BlackGold Capital Management. Financial details of the transaction were not disclosed. BlackGold specializes in energy and hard asset event-driven strategies while investing throughout the capital structure. KKR made the investment from its balance sheet and not through its funds.
KKR & Co. L.P. (NYSE:KKR), a leading global investment firm, and BlackGold Capital Management (“BlackGold”), a credit-oriented hedge fund specializing in energy and hard asset investments, today announced that KKR is acquiring a 24.9% interest in BlackGold. Financial terms of the transaction were not disclosed.
Established in 2006 by co-founders Erik Dybesland and Adam Flikerski, who have spent their entire careers in the energy sector, BlackGold specializes in energy and hard asset event-driven strategies while investing throughout the capital structure. The nature of BlackGold’s strategy and investments facilitates repeatable low correlation and volatility returns relative to the broader market and commodities, providing meaningful diversification benefits to its investors.
“Through this strategic investment in BlackGold, we are partnering with an outstanding team with an excellent track record of delivering returns to investors. We are thrilled to add BlackGold to our hedge fund platform and we look forward to a long-term partnership with Erik, Adam and the full BlackGold team,” Todd Builione, co-head of Hedge Funds at KKR, said.
Erik Dybesland and Adam Flikerski stated: “KKR has nearly three decades of experience investing in the energy sector and maintains a significant presence and technical expertise in the industry. Having access to KKR’s global network of relationships, institutional infrastructure and management expertise will introduce new areas of opportunity for BlackGold and our investors. We are confident that our partnership will strengthen relationships with our counterparties and within our investment universe, while enhancing the durability and unique capabilities of our franchise.”
Marc Lipschultz, KKR’s Global Head of Energy & Infrastructure, added: “We are always looking for exceptional teams with whom we can partner, and this investment marks the culmination of those efforts. We believe their deep industry knowledge coupled with our energy franchise will benefit both parties and lead to new investment opportunities for our respective investors.”
BlackGold’s management team will continue to manage the business independently, and BlackGold’s investment strategies will not change as a result of KKR’s investment. All of BlackGold founders’ capital will remain invested in the funds and the majority of the proceeds received from this transaction will be re-invested in the funds – maintaining full alignment with their investors. Pro forma this transaction, the BlackGold management team will own 75.1% of BlackGold.
The investment in BlackGold is part of KKR’s efforts to develop the firm’s hedge fund platform, which is co-led by Girish Reddy and Todd Builione, and to expand the firm’s energy business, which is led by Marc Lipschultz. KKR’s hedge fund platform includes its approximately $10 billion multi-manager hedge fund business (KKR Prisma) and a Strategic Stakes & Seeding business that invests the firm’s balance sheet to acquire minority stakes in hedge fund managers. BlackGold represents KKR’s second minority stake in a hedge fund manager, following the 2013 investment in Nephila Capital, an insurance-linked securities manager with approximately $10 billion under management.
The investment by KKR was made by the firm and not through KKR’s investment funds.
BlackGold Capital Management was founded in 2006 by Erik Dybesland and Adam Flikerski. BlackGold is a leading investment manager specializing in event-driven, energy and hard asset related credit. BlackGold manages assets primarily for family offices, insurance companies, hospitals, pensions, endowments and foundations, and is dedicated to achieving consistent volatility-adjusted performance, coupled with low correlation to commodity prices and the broader markets. BlackGold is based in Houston, TX and manages $1.4 billion in assets. Further information can be requested through BlackGold’s website at www.blackgoldcap.com.
KKR is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation at the asset level. KKR invests its own capital alongside its partners’ capital and brings opportunities to others through its capital markets business. References to KKR’s investments may include the activities of its sponsored funds. For additional information about KKR & Co. L.P. (NYSE:KKR), please visit KKR’s website at www.kkr.com.