UPDATE--KKR just raised a new $2 billion “special situations” fund for “distressed and event-driven investments.” Articles indicate they’ll be taking advantage of opportunities in Europe and U.S.
Run by credit specialists; brings to mind possibilities of swapping reinsurance contracts for other instruments discussed in recent posts in Ken Walker’s WMMRC thread.
KKR Closes $2.0 Billion Special Situations Fund
NEW YORK--(BUSINESS WIRE)-- Thu, Jan 9, 2014, 1:48pm EST
[[ Excerpts ]]
KKR, a leading global investment firm, today announced the final closing of KKR Special Situations Fund L.P. (“KSSF” or the “Fund”), a $2.0 billion global fund focused primarily on distressed and event-driven investments.
The Fund, for which KKR began soliciting third party capital in 2012, received strong backing from a diverse group of new and existing global investors, including public and corporate pensions, sovereign wealth funds, insurance companies, foundations, private banking platforms, family offices and individual investors. The Fund closed at two times its original target of $1 billion.
…Launched in 2010, KKR’s Special Situations platform is part of KKR’s $20.9 billion credit business, which is expected to grow to approximately $29 billion with close of the announced acquisition of Avoca Capital. The global special situations strategy is managed by Co-heads Nat Zilkha and Jamie Weinstein. The global team includes 15 dedicated investment professionals located in London, New York, San Francisco and Sydney and is supported by the broader KKR Asset Management credit investment team, comprised of over 40 dedicated credit investment professionals.
The special situations strategy invests across the capital structure in both privately negotiated transactions and in the secondary markets, seeking to earn strong risk adjusted returns from market dislocations, complex situations and distressed assets. KKR employs a partnership approach when working with companies and seeks unique opportunities to offer solutions to its various counterparties. The special situations strategy is dynamic and able to deploy capital in multiple ways in order to capture opportunities arising from market dislocation.
Nat Zilkha, Co-Head of KKR’s Special Situations and the firm’s Head of Credit, added: “Across the globe, we have identified a number of opportunities to invest in good companies in need of a partner with long-term capital to help them grow or to restructure a challenging situation. In each case, our goal is to be a constructive partner of choice while also delivering strong returns for our investors.”
KSSF held its first close in December 2012 and began investing shortly thereafter. Prior to raising the Fund, KKR’s special situations team primarily invested on behalf of large institutional clients through separate accounts. Today, with the new fund, KKR’s special situations platform has approximately $4 billion in assets under management. Since the inception of the strategy in 2010 through Q3 2013, the strategy has generated a gross internal rate of return of 20%, significantly outperforming the S&P 500, MSCI World, and ML High Yield Indices over the same period. Since inception, the strategy is ranked in the top quartile of similar vintage distressed and special situations funds.
Since the start of the new Fund’s investment period, approximately 30 percent of the Fund’s capital commitments have been deployed in investment opportunities across the globe....
Full article: http://finance.yahoo.com/news/kkr-closes-2-0-billion-110000341.html
KKR Raises $2 Billion Credit Fund to Invest in Distressed Debt
By Christine Idzelis Jan 9, 2014 12:00 AM ET
[[ Excerpts ]]
KKR & Co. (KKR), the New York-based private-equity firm run by Henry Kravis and George Roberts, raised a $2 billion for a fund that will provide financing to distressed companies globally.
KKR Special Situations Fund LP will invest in North America, Europe and Asia, according to Jamie Weinstein, the firm’s San Francisco-based co-head of special situations. Most of the distressed debt and rescue lending opportunities the firm sees are in Europe, where businesses are still de-leveraging after the 2008 financial crisis, he said.
…The Madrid-based company turned to KKR as it was the only fund that would provide long-term financing without any dilution to its equity, he said. The firm is present for Uralita’s monthly executive meetings and has shared “valuable contacts” from companies in its portfolio, Luján wrote in the statement.
…The new fund has a similar target for returns, according to Zilkha and Weinstein, and a flexible mandate to invest in below-investment grade loans and bonds, as well as equity.
KKR’s debt business is poised to expand further with the acquisition of Avoca Capital, a European credit-investment manager with about $8 billion of assets. The firm said in October that the deal is expected to be completed in the first quarter of this year.