Ex-KKR exec Navab navigates tricky waters of deal attribution

When Alex Navab, the former senior KKR executive, launches his debut fundraising, he’ll be talking up around 50 deals done during his time as head of the firm’s Americas PE, several sources told Buyouts.

Navab has a letter from KKR that allows him to cite these investments, sources said. He is not able to cite deal-by-deal track record for that universe of investments, which run from the end of 2008 to 2017, sources said.

The deals in question are from three funds. The majority were held in Fund XI, which closed on $9 billion in 2014. The rest were held in KKR’s 10th fund, which closed on around $17.6 billion in 2008, and North America Fund XII, which raised about $14 billion in 2017, sources said.

Navab announced his new firm in April, though he did not talk about fundraising. Sources have told Buyouts they expect Navab to launch his debut fund soon and target $3 billion. It’s unclear at how much Fund I will be capped.

Track record is a touchy issue for executives who leave to start their own firms. Most PE shops closely protect an executive’s track record, which forces the exec to prove by other public sources which investments they worked on during their time at the firm. These can include regulatory filings and news releases.

The problem is that LPs interested in new firms want to see verifiable track records as they assess new managers. Around 84 percent of 98 institutional investors who responded to a Probitas Partners survey in 2017 cited verifiable track record as the most important factor in backing a first-time fund.

One institutional investor who responded to the survey said that to gain his attention, a first-time fund needed at least a 3x gross-multiple track record, Buyouts reported.

It’s interesting that Navab has a letter from KKR laying out the investments he can cite, while still not giving access to actual performance. Sources speculated that Navab got the letter as a way to ensure he is not violating any sort of attribution restrictions.

Goldman Sachs is helping Navab in the early days, lending industry relationships, resources and expertise, including introductions to potential capital sources as well as operations support, sources told Buyouts.

Navab is looking for deals even in the absence of a fund, and if he finds an opportunity, he could source capital from individual investors to fund a transaction, he told Buyouts in an April interview.

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