PE HUB Wire Highlights, 11.11.19

KKR gets ready for big fundraising in 2020, Financo hires Lazard’s David Solomon

Happy Monday!

How’s your week looking? I’ll be spending a lot of time talking about long-term holds in private equity and ways GPs and LPs are holding certain assets beyond the confines of the traditional PE structure. If you have some thoughts on this trend, hit me up at cwitkowsky@buyoutsinsider.com.

I’ll be on the Wire this week for Luisa, who is off. Let’s see what’s going down.

BigReuters reported last week that KKR was planning to target $15 billion for its next Asia fund. I reported in August that the next Asia fund would hit the market in late 2019 or in the first quarter at a target that would be at least match the tally of the prior fund, if not eclipse it.

At the target reported by Reuters, KKR Asia Fund IV would represent a huge jump from the prior fund, which closed on $9.3 billion in 2017. Reuters points out that the fund target and timeline could change since nothing has yet been finalized.

“Asia growth (althought diminished lately) is still phenomenal,” an LP told me over the summer. Asia Fund III had about $5.1 billion of unspent capital as of Sept. 30, 2019, according to KKR’s third quarter earnings report. Fund III was generating a 27.3 percent internal rate of return and a 1.16x total value to paid-in multiple as of March 31, 2019, according to information from Florida State Board of Administration.

Fund III had offered LPs almost $1 billion of co-investment as of July, an LP told me. With enormous deal potential in the region, KKR’s fund platform looks to be a huge draw.

Also …

I’m still tracking KKR’s launch of its next North America fund, which is expected in 2020 as well. The Asia fund will kick off fundraising first before the firm puts its next flagship pool on the market, sources told me. I’m not clear on target for the main fund, but entirely possible it won’t match the target of the new Asia fund.

CONTINUE READING