In Washington State, KKR admits to ‘a bit of chaos’(4)

Making a presentation before the Washington State Investment Board yesterday, KKR’s George Roberts and Johannes Huth, right,asked for a commitment to a massive new European fund and predicted a reinvigorated deal market will follow the current mega-malaise.

George Roberts and Johannes Huth, co-founder and head of European operations, respectively, at Kohlberg Kravis Roberts, made an appearance yesterday before the Private Markets Committee of the Washington State Investment Board to ask for a commitment to the private equity giant’s third European fund.

Washington is a key relationship for KKR, having committed billions to previous KKR vehicles. The US state pension, based in Olympia, Washington, has a total of $900 million committed to two previous KKR Europe funds. It has a total of $3 billion in commitments to the two most recent main KKR private equity funds. KKR is seeking to raise roughly €8 billion for KKR European Fund III. The second European fund drew €4.5 billion and had a final close in 2005.

The Washington State private markets team is led by Tom Ruggels and advised by Capital Dynamics.

Roberts did not address the topic of his firm’s IPO plans, but he did discuss the beleaguered state of the large leveraged buyout market, according to a person at the meeting. “He said that we’re currently in a bit of chaos, and the market cannot [currently] support a large deal. But he said this would be temporary, and that in the meantime the firm could do smaller, well priced, well structured deals.”

Roberts said that eventually “new capital will come into the market” that will reinvigorate the large LBO strategy pursued by KKR.

Other firms to make presentations before the private markets committee yesterday included Warburg Pincus, which is seeking as much as $15 billion for a global fund; Advent International, in the market with a new Latin America megafund; and Avenue Capital Group, which is seeking to raise supplemental capital for its Avenue Special Situations Fund, according to a Washington State meeting agenda.

The Carlyle Group yesterday closed its latest European buyout fund on €5.35 billion.