KKR promotes Stavros and Taylor; Monroe buys a VC lender; Oaktree’s Hobbs discusses DEI

Monroe Capital is acquiring venture lender Horizon.

Good morning, Hubsters. MK Flynn here with the Wire on a busy Thursday.

We’ve got a lot of PE news to report this morning, including Monroe Capital’s acquisition of venture capital lender Horizon.

If you’ve got a sweet tooth, you’ll enjoy hearing about a deal out this morning from Levine Leichtman Capital Partners.

And we’ve got a Q&A with Oaktree’s Milwood Hobbs, Jr, in our Black History Month series.

But first up, a pair of people moves at KKR.

It’s a small world after all. Pete Stavros and Nate Taylor have been named global co-heads of KKR’s private equity business. Since 2019, they have served as co-heads of PE in the Americas.

In their new roles, Stavros and Taylor will “work closely with regional PE leadership and teams around the world to support alignment on global investment themes, share best practices and operational playbooks and facilitate greater mobility of talent,” said the firm’s announcement.

KKR’s PE business has nearly doubled in AUM since 2019. As of December 31, the $165 billion PE business includes approximately 300 investment professionals looking after a portfolio of more than 200 companies.

“We are incredibly proud of our strong track record in private equity and the firm’s leadership positions in the US, Europe and Asia,” said Joe Bae and Scott Nuttall, co-CEOs. “This new global role will further optimize the culture of collaboration that underpins the success we deliver for clients.”

Stavros and Taylor both joined KKR in 2005. Stavros has been a big champion of employee ownership.

“Over their nearly two decades at KKR, Nate and Pete have proven themselves as not only extraordinary investors, but true role models and leaders within the firm,” Bae and Nuttall said. “They have also instituted a number of innovative frameworks for value creation, including broad based employee ownership and operational toolkits that have been instrumental in delivering value to our portfolio companies, their employees and communities, and for our clients.”

Monroe Capital, the Chicago-based boutique asset management firm specializing in private credit markets, is acquiring Horizon Technology Finance Management, the investment advisor to Horizon Technology Finance Corp.

As a venture capital lender, Horizon has deployed over $3 billion in loan commitments across more than 300-plus VC-backed companies since its founding in 2004.

“We are excited by the prospects of leveraging our strong fundraising and investor relations capabilities to offer our limited partners a differentiated ‘alpha’ generating product in one of the fastest growing segments of private credit,” said Monroe chairman and CEO Ted Koenig.
“Consistent with our thesis on technology and software lending, we believe that venture lending benefits from similar characteristics,” said Monroe president Zia Uddin.

“Technology-related companies compete in some of the most rapidly growing sectors of the US economy with growth fueled by ongoing innovation and improvements in technology, which requires financing from sophisticated lenders who understand their businesses and have industry expertise. Companies focused on growth today find themselves facing significant increases in cost of capital and fewer choices of high-quality, user-friendly debt providers. We believe Monroe’s acquisition will provide Horizon the foundation to become the lender of choice to venture capital backed companies in the market.”

Chocolate lovers. Levine Leichtman Capital Partners, based in Los Angeles, has acquired Kilwin’s Quality Confections and Kilwins Chocolates Franchise, which specialize in chocolate, ice cream and confectionary products. The acquisition marks the third platform investment of LLCP Lower Middle Market Fund III LP.

Founded in 1947 and headquartered in Petoskey, Michigan, Kilwins “has a proud heritage of combining quality-first products with superior customer service to create an industry-leading chocolate, ice cream and confectionary experience,” according to the deal announcement.

LLCP has invested in more than 25 brands in the franchising and multi-unit sector, including food-related businesses, such as Tropical Smoothie Cafe, Nothing Bundt Cakes, Mountain Mike’s Pizza, Wetzel’s Pretzels, and Global Franchise Group.

Baker’s dozen. There have been a slew of food deals announced already in 2023.
Obey Martin Manayiti rounded up half a dozen snack-related transactions in January, and Irien Joseph found another half a dozen in February.

Black History Month. PE Hub is featuring interviews with private equity professionals who are Black. Today, we hear from Milwood Hobbs, Jr, managing director and head of North American sourcing and origination at Oaktree Capital Management.

Hobbs leads Oaktree’s North American sourcing and origination group, which focuses on private credit sourcing and deal origination for the firm’s US private debt, global private debt, special situations and global opportunities strategies. He also serves on the investment committee for Oaktree’s direct lending platform. Prior to joining the firm in 2013, Hobbs was an executive director at Natixis Securities, focused on building the high-yield sales and trading franchise. Earlier in his career, he spent five years at Goldman Sachs as a vice president in leveraged finance origination and sales.

Here are some excerpts from the interview:
Over the last couple of years, PE firms have talked a lot about making the industry more inclusive for people who are Black and/or members of other underrepresented groups. In your view, how are PE firms doing when it comes to diversity, equity and inclusion?

I think PE firms have been very proactive acknowledging the gap in diverse talent. Moreover, it actually requires patience and a real focus to create a pipeline of people. Programs like Girls Who Invest, SEO and Alt Finance have been on the forefront of developing diverse talent in the Alternative and PE space. Oaktree has been very involved in these programs with really positive results to support the investment in diverse talent.

What’s the biggest mistake PE firms make when it comes to underrepresented groups?
PE firms assume that training is core to retention when in fact having diverse leadership that is active in retention and training is probably most important. Moreover, I think you have to benchmark and define success – which is core to Oaktree’s Diversity & Inclusion philosophy.

It’s Black History Month, and PE Hub is showcasing Black leaders in private equity. Please tell us about someone you admire.

Reginald Lewis is someone I admire for his accomplishments in the PE space. He was ahead of his time in terms of aptitude, execution and passion.

Note: In 1987, Lewis bought Beatrice Foods for $985 million in the largest leveraged buyout of overseas assets by an American company at the time. By 1992, TLC Beatrice International had annual sales of over $1.8 billion, making it the first Black-owned business to generate a billion dollars in annual sales. Lewis died at the age of 50 after a short illness in 1993. For more info, see the Reginald F. Lewis Foundation website.

That’s a wrap for today. Tomorrow, Obey will write the newsletter to finish up the week, On Monday, PE Hub Europe editor Craig McGlashan will be filling in for me as I take a couple days for R&R.

Happy dealmaking,


Correction: An earlier version of this headline misspelled Stavros’ name. It has since been corrected.