Private investment major KKR & Co is gearing up to secure approximately $20bn from investors for its latest flagship North America private equity fund, North America Fund XIV, according to a report by Reuters. 

According to Reuters’s sources, KKR commenced its investor outreach earlier this month. The firm aims to achieve a net internal rate of return in the high-teens percentage range and plans to deploy capital steadily at a rate of 20% to 25% annually. 

Concurrently, KKR’s stock showed a 1.2% increase to $110.24 in early morning trading on Monday. 

 The firm’s previous North American private equity fund, fully deployed since its 2017 launch, boasted a net IRR of 20.5% as of the end of March, according to regulatory filings. 

As of 31 March, KKR manages assets totaling $578bn. 

Private equity giant Blackstone plans to double its European Private Credit Fund within the next year after raising €1bn from the region’s affluent investors, aiming to mirror the success of its $54bn US flagship fund, according to a report by the Financial Times. 

Mike Carruthers, Senior Managing Director and European Head of Private Credit at Blackstone, said: “It took us 21 months to get to €1bn. 

“I would like to challenge the team to get to €2bn in half that time, to double it in the next 10 to 11 months.” 

ECRED was launched in 2022. The fund has been launched in seven countries including the UK, France and Italy, through partnerships with distributors such as BNP Paribas and Julius Baer. Blackstone plans to expand into more markets and add new distributors soon. 

Blackstone runs ECRED similarly to its US counterpart BCRED targeting 80-85% private credit assets and 15-20% liquid assets. 

The Carlyle Group and Goldman Sachs Private Credit have extended a $1.1bn payment-in-kind loan to global fund administrator Apex Group, according to a report by Bloomberg. 

According to a statement, the newly secured funds are expected to support Apex Group’s growth initiatives. 

PIK debt is typically secured against assets held by a company’s holding entity rather than its revenue-generating operating unit. This arrangement allows businesses to increase their debt load without breaching covenants that restrict leverage levels. 

Carlyle and Goldman Sachs have previously financed Apex Group, beginning in 2020, when they provided a preferred equity note, followed by additional debt financing in 2021. Genstar Capital holds the majority ownership in Apex Group, while minority stakes were sold to TA Associates, Carlyle and Mubadala Investment Company in 2021. 

Last week, Apex Group appointed Katie Baxter as Head of Private Clients and Family Office. In her new role, Baxter will lead Apex’s private clients and family office service offering. 

 

Global investment firm HPS Investment Partners has raised $21.1bn for its flagship Specialty Loan Fund VI, which includes commitments from investors totalling $14.3bn, according to a report by the Financial Times. 

The fundraising, which also incorporates billions of dollars sourced from bank loans, marks one of the largest private credit funds raised to date, and an overall record for HPS since it was founded in 2007.

HPS’s Specialty Loan Fund VI targets companies requiring capital in challenging financial situations, offering loans with interest rates approximately 7 percentage points above the Sofr benchmark, currently yielding between 12% and 13%. 

Recent transactions include a €1.5bn loan to One Rock Capital for the buyout of Constantia and an $800m loan for medical device manufacturer Tecomet. 

According to the FT’s sources, HPS is considering options including a potential public listing or merger with another prominent private investment group.    

While HPS has reportedly filed documents with securities regulators in preparation for a potential IPO to facilitate initiatives like rewarding senior staff or acquiring competitors, the FT’s sources have noted that no final decision has been made. 

Founded in 2007 by Scott Kapnick, Scot French and Michael Patterson, HPS originated within JPMorgan Chase’s asset management division before becoming an independent entity in 2016. The firm currently manages $114bn.

Carlyle Group and KKR have emerged as final bidders for Discover Financial’s $10bn portfolio of US student loans, underscoring private investment firms’ growing interest in filling the lending void left by traditional banks, according to a report by the Financial Times. 

Discover, in the midst of a $35.5bn acquisition by Capital One, initiated the sale of its student loan portfolio as part of the merger deal. Other final bidders include major players in the private credit industry such as Ares, Blackstone, Brookfield, Fortress and Oaktree. 

The bidding is expected to conclude later this month or in early July. 

Since the financial crisis, private credit firms have increasingly filled the void left by banks retreating from traditional asset-backed lending, accelerated by the collapse of several US regional banks last year, prompting other lenders to seek capital by divesting billions of dollars’ worth of loans. 

Both Carlyle and KKR have expanded into various asset-backed investments, including rooftop solar power, credit card receivables, mortgages and rail cars. The latter and Kennedy Lewis purchased about $7bn in recreational vehicle loans from the Bank of Montreal. 

Private credit giant Blackstone has also shown interest in asset-backed finance, acquiring $1.1bn in consumer credit card debt from Barclays earlier this year, while Ares acquired a $3.5bn portfolio of consumer and small-business loans from PacWest last June. 

The student lending sector, once a domain of major banks like Citigroup and Bank of America, has seen a significant retreat since 2008 due to higher default rates compared to other debt types. Discover, among the last private lenders in this sector, has faced regulatory scrutiny over its lending practices, including a $35m settlement with the Consumer Financial Protection Bureau in 2020. 

Carlyle has been actively investing in student lending, recently acquiring a $415m portfolio from Truist and investing in Monogram, a provider managing approximately $7bn. 

Global financial advisory and asset management firm Lazard is exploring opportunities to acquire a private credit firm to enhance its $250bn asset management division, according to a report by Bloomberg. 

In a Bloomberg Television interview on Thursday, CEO Peter Orszag indicated that the company is “in the mix, evaluating lots of options” within private markets. Lazard is particularly interested in acquiring firms specialising in private credit, infrastructure, real estate and areas where it currently has limited presence. 

Orszag emphasised: “We’re going to be very cautious as we go through this, both on the pricing — to make sure it’s in shareholders’ interest to do some of these acquisitions — but also on culture. 

“Because you can get something at the right price and, if there’s not a good cultural fit, it still doesn’t work.” 

Orszag, who took over the 175-year-old investment bank late last year, aims to double revenue by 2030, targeting equal growth in both the advisory and asset-management units. 

Similarly, JPMorgan Chase & Co has also been on the lookout for a private credit firm to strengthen its asset management business. Earlier this year, JPMorgan held talks to acquire Chicago-based Monroe Capital, though the negotiations did not lead to a deal. 

Last year, the Abu Dhabi wealth fund ADQ initiated preliminary talks to acquire Lazard, though discussions quickly fell apart over concerns about maintaining Lazard’s independence. 

Golden Goose Group, the Italian luxury sports brand owned by British private equity firm Permira, has postponed its much-anticipated Milan stock market listing just a day before the IPO was set to be priced, according to reports. 

Golden Goose announced on Tuesday that it was delaying the IPO due to a “significant deterioration in market conditions” following recent European parliament elections and the announcement of a general election in France. 

The FT’s sources revealed that Golden Goose’s decision was made after a day of intense deliberations. Although the company was confident in the launch price, there were concerns that investors might quickly sell off their shares once trading began. 

Golden Goose was set to price at €9.75 per share, near the lower end of its €9.50 to €10.50 range, aiming to raise approximately €600m, which would have valued the company at nearly €2bn.  

Just last week, Invesco committed to purchasing €100m worth of shares as a cornerstone investor. 

In an interview with Bloomberg, Mark Nelson, senior equity analyst at Killik & Co, said: “It didn’t feel like amazing timing. They are not an Hermes, they are not a Brunello Cucinelli — they are a different business in that they focus on trainers. I think it’s clearly had some weaker points to the best in class luxury brands.” 

Had it proceeded, Golden Goose’s listing would have been Milan’s largest since the €599m sale of gambling company Lottomatica last May. 

Permira previously faced challenges with its 2021 IPO of British boot brand Dr Martens in London, the shares of which have declined 78% since their market debut. 

Bank of America, JPMorgan Chase & Co, Mediobanca and UBS Group were advising on Golden Goose’s IPO. 

Pritzker Private Capital, the Chicago-based private equity firm founded by heirs to the Pritzker family fortune, is targeting $3bn for its fourth buyout fund, Pritzker Private Capital IV, according to a report by Buyouts Insider. 

The new fund is expected to close in Q4 2024, according to documents from the Plymouth County Retirement Association.  

The firm’s previous fund, PPC III, closed in 2021 at $2.7bn, marking it as one of the market’s largest family investment vehicles at the time and a significant increase from Pritzker’s second fund, which raised $1.8bn in 2018. 

PPC III was earning a 1.4x gross multiple and an 18.8 percent gross IRR as of December 2023, while PPC II was generating a 2x gross multiple and a 21.5 percent gross IRR, according to the Plymouth County documents. 

Established in 2002 by Tony Pritzker and his brother JB Pritzker, members of the billionaire family behind Hyatt Hotels, the firm initially operated as a family wealth manager and now invests both family and third-party institutional capital in mid-market buyouts. Tony Pritzker currently serves as chairman and CEO, while JB Pritzker left the firm to become the governor of Illinois in 2019. 

Pritzker Private Capital emphasises flexible, long-duration investing, a strategy known as family direct investing, setting it apart from the traditional private equity model that typically targets an exit within three to five years. 

The firm primarily makes control investments in North American businesses in the manufactured products and services sectors, with EBITDA of more than $15m and enterprise values ranging from $200m to $1.5bn or greater. Pritzker’s preferred deal types include family or founder liquidity events, management buyouts, corporate carveouts and industry consolidations. The firm writes equity checks of $100m to $400m per deal, with the capacity to deploy up to $750m. 

Pritzker’s portfolio currently includes 17 investments, the most recent being HeartLand, a commercial landscaping services provider acquired from Sterling Investment Partners. Last October, Pritzker also invested in insurance broker and employee benefits provider Lawley and acquired multinational food products company Sugar Foods Corp. 

US private equity firm Advent International and a subsidiary of the Abu Dhabi Investment Authority will acquire a $2.5bn to $3bn minority stake in money management firm Fisher Investments, valuing FI at $12.75bn. 

Following completion of the deal, which marks the first external investment in FI, David Mussafer, Managing Partner at Advent, will join FI’s board of directors. FI’s founder, executive chairman and co-CIO Ken Fisher, CEO Damian Ornani and the remaining management will continue in their current roles.

As part of the deal, Mr Fisher will sell personal holdings in FI to Advent-managed funds — whose investors include Lunate Capital managed funds, Mousse Partners and FI’s largest institutional client, South Korea’s National Pension Service — and ADIA. Mr Fisher will retain a majority of beneficial ownership and of voting shares exceeding 70%. 

As an investment adviser, wealth and asset management firm, FI manages over $275bn for over 150,000 clients globally, according to a press statement. 

Mr Fisher said in a press statement that the transaction was “aimed dually at estate tax and planning purposes while assuring that FI will maintain its traditional culture, growth evolution and devotion to exceptional client service”, emphasising its “atypically long holding period for a private equity transaction”. 

JP Morgan Securities, RBC Capital Markets and Paul Hastings advised FI. Ropes & Gray advised Advent and Gibson Dunn advised ADIA.