KKR provides shot in the arm for slowing 2019 Europe PE fundraising with €5.8bn fund close


Global private equity major KKR says its position in Europe has “never been stronger” amid the €5.8bn final close of one of the biggest funds raised to target the region this year.

The firm’s European Fund V is almost double the size of the €3.3bn Fund IV it closed in 2015, and came in above its initial €5bn target.

KKR’s raise puts its just behind Carlyle in terms of the biggest Europe-dedicated buyout vehicles raised this year, with the latter having closed its Europe Partners V fund on €6.4bn last month.

The pair of hefty funds provide a shot in the arm for what seemed to be a faltering second half of the year for European private equity capital raising, with a PitchBook report from last month suggesting fundraising numbers in the region could fall to some of their lowest results in years.

Buyout fundraising was trending towards its worst result in a decade in terms of the number of funds closed, the company’s 3Q 2019 European Private Equity Breakdown said, as well as the smallest amount of capital raised in three years.

That capital total – €51.6bn was raised across 64 funds in Q1 to Q3 – could still prove to be above any other year for the last decade bar 2017 and 2018, but an outsized proportion of the year’s activity coming from H1 could mean a severe cooling has begun.

Other sizeable private equity fundraises based in Europe this year include Cinven striking its €10bn hard cap for its seventh flaghip fund in May, although that vehicle’s investment strategy is not solely focused on the region.

Astorg steamed past its target for its latest flaghip buyout fund in January, reaching its €4bn hard cap in just three months.

IK Investment Partners is currently out eyeing up to €2.5bn for its ninth flagship fund, but there are few other buyout vehicles in the market which look set to finish on multibillion-euro hauls this year.

Johannes Huth, who joined KKR as the first employee in Europe in 1999, is now head of KKR EMEA.

He said, “KKR has been investing in Europe for over twenty years and our position has never been stronger.

“We will invest our fifth European fund by maintaining the differentiated approach that has served us so well to date, combining our local country knowledge with the skill and insights of our sector teams to source and execute investments.

“Europe’s complex dynamics create significant opportunities to deploy capital and continue delivering value and outperformance for our investors.”

The firm said it would be investing $400m of capital alongside investors through the firm’s balance sheet and employee commitments.

KKR completed its first European investment in 1996 and raised its first dedicated European fund in 1999.

The firm said its EMEA private equity platform is currently investing a combined $11.6bn, and has generated a 2.6x gross multiple and 23.6 per cent gross IRR since 2009.

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