Kohlberg Kravis Roberts plans to begin raising its next global private equity fund “sometime early next year”, Scott Nuttall, head of KKR’s global capital and asset management group, said during the firm’s third quarter earnings call Wednesday.
KKR’s most recent global private equity fund, the KKR 2006 Fund, closed on $17.6 billion in 2006. It is close to 75 percent invested, with almost $5 billion of dry powder remaining, the firm said Wednesday.
The value of KKR’s private equity portfolio was up 6 percent in the third quarter, and is up 20 percent year-on-year. So far in 2010, the firm has returned approximately $2.4 billion of capital to limited partners.
KKR also increased its assets under management to $55.5 billion as of 30 September, up roughly 10 percent compared to $50.4 billion a year ago, and up $1.1 billion, or approximately 2 percent, from last quarter.
“The macroeconomic environment has not changed much since we spoke last quarter,” Nuttall said. “We continue to face an uncertain IPO market, where pricing and post IPO trading has left many planned IPOs on the shelf.”
While the firm deployed only $350 million of capital in the third quarter, it has deployed $2.2 billion of equity in the private markets segment so far in 2010, and has committed to transactions representing over $2 billion of additional equity capital that have closed or are expected to close in the fourth quarter. About 1 billion of that is comprised of private equity transactions, Nuttall said.
In Q3, KKR held a first close on $700 million for its China Growth Equity fund. “China growth is a new strategy for us,” Nuttall said. “It will enable us to take advantage of more of the opportunities we’re seeing in China by giving us a pool of capital to deploy in smaller cap companies there.”
The size of KKR’s next private equity fund, which will be focused on North America, has yet to be decided, but Nuttall said the firm is feeling “much more upbeat” about the fundraising environment than it was 12 months ago.
KKR listed on the New York Stock Exchange on 15 July, with its shares trading at $10.50. On Wednesday afternoon, the shares were trading at $12.59.