KKR & Co is an NYC-based investment company that just unveiled plans for its first fund ever investing exclusively in mid-size companies. KKR is trying to raise $5 billion for the new fund. 💰
KKR, formerly known as Kohlberg Kravis Roberts & Co, is a private equity GIANT. We’re talking roughly 280 private equity investments worth $545 billion. The firm’s new fund for mid-size companies, called ‘Ascendant,’ will target a variety of sectors, including financial services, healthcare, industrials, consumer, technology, media and telecommunications.
A couple of months ago, we wrote about the explosion of capital flowing into private markets. For reference, $2.4 trillion was raised in private markets last year, while middle-market buyout funds alone generated a record $67 billion in 2021. Why? 🤔 A definitive answer is tough, but generally speaking, highly-volatile public markets started to deter wealthy investors. There was no shortage of blockbuster IPOs and SPAC deals during the pandemic, but those same IPOs failed to impress at the start of 2022. Perhaps investors anticipated this, opting instead for the more exclusive world of private investments.
According to Bloomberg, KKR’s decision to launch a $5 billion fund in pursuit of mid-size companies comes from PE firms’ high demand for hefty investment yields to offset interest rates. With so many investors over-allocated to PE throughout the pandemic, buyout firms have to pump out new funds to keep up.
This is a space to watch, for sure. Even the SEC is watching! 😅