KKR Infrastructure Conglomerate, which began raising money in June, is one of two companies KKR formed to attract capital from wealthy individuals who don’t necessarily meet the minimum investment threshold to invest in a traditional private fund. The other is KKR Private Equity Conglomerate.
The infrastructure vehicle received backing from 12,632 investors, according to a filing last week, which amounts to roughly $141,000 per investor.
The KKR conglomerates represent an emerging way of doing business for alternative investment firms, which have traditionally relied on raising large amounts of money from institutions such as pensions and endowments.
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In the past couple of years, these larger investors have reined in private equity investments amid elevated interest rates and economic uncertainty — spurring KKR and competitors such as Blackstone Inc. and Apollo Global Management Inc. to pursue well-off individuals.
KKR Infrastructure and KKR Private Equity represent the first time KKR has opened these types of deals to accredited investors, defined as individuals who, among other things, have a net worth of more than $1 million, not including their primary residence.
Raising billions of dollars from accredited investors requires KKR to reach far greater numbers of people, and to change the way it markets its funds. Instead of in-person meetings with the chief investment officer and trustees of a large pension fund, KKR has to conduct widespread outreach and education through webcasts to individual investors and their financial advisers.
The number of people who invested in KKR Infrastructure exceeds the figure given in the filing, according to a person familiar with the fundraising. That’s because the investor count in the filing includes feeder-type funds that pooled capital from more than one person.
Sycamore Partners is one of the buyout equity firms that have expressed interest in taking U.S….
Natural Gas Threatens Canadian Taxonomy
Despite warnings on its climate impact, demand for Canadian liquefied natural gas continues to grow.
Industry experts have expressed concern on the potential inclusion of natural gas in Canada’s proposed taxonomy and the way it could undermine its domestic and international credibility.
Launched in 2021, the Canadian Sustainable Finance Action Council delivered a roadmap report detailing the taxonomy’s approach and governance structure the following year – setting the path for further progress. The council completed its three-year mandate on 31 March.
But progress on the taxonomy has been slow. Research from Canadian environmental advocacy organisation Environmental Defence pointed to reports suggesting that internal government conflicts around the place of natural gas in the taxonomy had stalled its release.
“There was significant pressure for the taxonomy to specifically allow liquefied natural gas (LNG) exports as a ‘transition’-labelled activity, even though there is scientific consensus that averting the worst impacts of climate change requires the rapid phase-out of fossil gas,” Adam Scott, Executive Director at Shift: Action for Pension Wealth and Planet Health, told ESG Investor.
He added that the inclusion of gas in the Canadian taxonomy was “entirely unworkable” and a “recipe for additional greenwashing”.
“Institutional investors should listen to experts [and] be sceptical of any claims made by the LNG industry about its role in our future energy system,” said Scott.
Crushing credibility
The environmental impacts of natural gas, particularly LNG, are high. Methane, the primary component of LNG, has a global warming potential around 82 times higher than CO2 when burned as a fuel.
“Wrongfully labelling gas as ‘sustainable’ under this taxonomy would entirely squash its international credibility,” warned Julie Segal, Senior Manager for Climate Finance at Environmental Defence, adding that the inclusion of fossil fuels that do not align with climate goals would also defeat its purpose.
“If Canada diverts further from science it will not only be embarrassing, but will invalidate all of the work that has gone into creating a tool that helps clean up and align our financial system with climate action.”
Ahead of the publication of the UK’s own taxonomy, the CEOs of three major sustainable investment organisations echoed similar concerns on the inclusion of natural gas –
CVC activates three new funds
Private markets investment major CVC Capital Partners has activated three new funds — Americas Fund IX, Asia VI, and Strategic Opportunities III — due to “increasing deployment activity”.
Following the activation of €26.8bn Europe/Americas Fund IX — the largest private equity fund ever raised globally — and $6.8bn Asia VI — which is over 50% large than its predecessor fund — the vehicles will start charging management fees on committed capital. Meanwhile, predecessor funds Fund VIII and Asia V will also start charging fees on invested capital albeit at a lower rate.
For strategic opportunities, management fees are calculated as a percentage of invested capital with no “step down” post investment period.
SumUp raises €1.5bn from private credit lenders led by Goldman
London-based card reader maker SumUp has secured a €1.5bn private credit loan package from a group of lenders led by Goldman Sachs. Other participants include BlackRock, Apollo Global Management, Oaktree Capital Management and Vista Credit Partners.
According to a press statement, cash from the round – one of the largest European private credit deals of its kind in recent years – will be used to “refinance existing debt and seize global growth opportunities”.
A report from Reuters cites unnamed sources familiar with the mater in revealing that pricing of the loan is set to come in at 650 basis points over the benchmark rate, down from the 825 points listed in public filings, and it is expected to be issued at a discounted price of 99 cents on the euro.
SumUp’s new investors include AllianceBernstein, Arini, Deutsche Bank, Fortress Investment Group and SilverRock Financial Services, joining existing investors such as funds managed by BlackRock, Crestline Investors, Liquidity Capital, Oaktree Capital Management, Sentinel Dome and Temasek.
Level secures new PE investment and acquires probate lender Tower Street
Level, a UK-based and FCA-regulated lender operating in the family and private client law sectors, has secured a £5m equity investment from private equity firm Kendal Capital and acquired probate finance provider Tower Street Finance.
The firm has also secured additional £5m debt investment from Correlation Risk Partners to support its growth plans.
According to a press release, the acquisition of Tower Street Finance gives Level a presence in a new market which is forecast to grow rapidly due to lengthy probate service processing delays and the cost-of-living crisis.
Probate lending enables beneficiaries to access funds to pay IHT bills before probate is granted or liquid assets such as property or land are sold.
EU Sparks Controversy on Energy Charter Treaty Drop
European Union will withdraw from ‘anti-green’ treaty on environmental grounds, but sources warn of impact on renewable investments.
The European Parliament’s vote last week to withdraw from the controversial Energy Charter Treaty has been interpreted as a near-certain ‘death blow’ to a decades-old agreement that is widely perceived as outdated and anti-green.
But the decision, which lawmakers say is necessary to protect the European Union’s climate policies against litigation from fossil fuel companies, may not be as positive for the energy transition as some believe.
James Rogers, an international arbitration lawyer and partner at law firm Jenner & Block, said the EU’s withdrawal – which he said left the treaty “dead” – could inadvertently harm the bloc’s green energy ambitions by reducing investor protections against policy changes.
Set up in 1994 in the aftermath of the fall of the Soviet Union, in part to open up gas imports from Russia and eastern Europe, the ECT provides energy investors with legal protection against the policy whims of national governments. Governments that expropriate assets or arbitrarily change rules may be taken to arbitration under the treaty. More than 50 countries across Europe and Asia have signed up to the treaty since, with Japan its easternmost member.
But as climate change became a key policy concern in Europe in subsequent years, the ECT progressively turned into a weapon for fossil fuel companies to fight against green policies that harmed their interests. It was under the ECT that German utilities RWE and Uniper, for example, sued the Dutch government for €2.4 billion over its plan to phase out coal-fired power back in 2021.
Critics say the threat of a legal challenge under the ECT alone has a “chilling effect” on green policy – which is real but difficult to quantify.
Some of its members pushed to modernise the framework. But these efforts largely failed, and a growing number of European signatories have already left or plan to leave the treaty, including the UK, France, Germany, Spain and Poland. The EU’s departure now turbo-charges that trend.
“Finally, the fossil dinosaur treaty is no longer standing in the way of consistent climate protection, as we no longer have to fear corporate lawsuits demanding billions of euro in compensation brought before private arbitration tribunals,” Anna Cavazzini, Member of the European Parliament and Rapporteur for the Trade Committee, said following the vote last week.
Not anti-green
According to