Buyouts Snapshot: KKR’s Kravis more bullish on deals, firm eyes bigger North America fund

Kohlberg Kravis Roberts & Co said it expects KKR North America Fund XII to exceed the $8 billion raised by its predecessor, as it takes aim at a more favorable deal market.

With energy and other commodity prices reeling, and buyout opportunities emerging, the firm sees more opportunity now than in recent quarters.

“If you look at our history, for almost 40 years now, the more dislocation and the more volatility, the better we’ve done,” Henry Kravis, the firm’s co-founder, said on a conference call with Wall Street analysts. “Now we’re in even better shape because we’re global and we can invest around the world.”
Kravis said it’s tougher to invest when prices are higher, but levels have come down in a number of sectors. “It’s become more interesting for us,” he said.

On the fundraising front, KKR said it has started work to raise North America Fund XII. Since North America Fund XI has turned in top-quartile results, North America Fund XII is expected to draw in more capital, the firm said. Market sources have put the target for the newer fund at $10 billion.

KKR said it will probably activate Fund XII in 2016 or possibly 2017, since it has about $4 billion in uncalled commitments for North America Fund XI.

KKR also confirmed that it is raising its first growth equity fund to take minority stakes in more rapidly expanding companies. Its fundraising machine is also drawing commitments for its Europe IV fund, Special Situations II, KKR Asian Fund II, and KKR Real Estate Partners Europe, as well as its hedge fund strategies.

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