KKR raised a record annual fundraising amount of $29 billion in 2016, thanks in part to its latest buyout fund, KKR Americas Fund XII.
During the firm’s fourth-quarter earnings conference call on Thursday, KKR chief financial officer Bill Janetschek said that total included $16 billion from private markets, driven by its twelfth buyout fund.
“We’re about done [fundraising for Americas XII]; we expect to hit the $12.5 billion hard-cap, which has been upsized slightly, and our commitment will be on top of that,” KKR head of global capital and asset management group Scott Nuttall said on the call.
According to a Securities and Exchange Commission filing from 27 December, Americas XII had raised $10.84 billion from 184 commitments as of that date.
Janetschek also added during the call: “Just keep in mind, we increased the hard-cap to $12.5 billion. That means if we do get to $12.5 million, you’ll see another $600 million in [assets under management] come on when that capital is raised.” AUM stood at $129.6 billion as of 31 December, down from $131.1 billion at the end of the previous quarter due to limited partner distributions.
It was unclear how many investments Americas XII had made to-date.
According to the KKR fourth-quarter earnings statement, the general partner commitment to Americas XII stands at 7.8 percent. By comparison – excluding an outlier of 22.5 percent GP commitment to KKR’s first tech fund, Next Generation Technology Growth Fund – the average GP commitment level for KKR’s 10 other active funds was just 2.98 percent.
“We increased the commitment to our own funds, including Americas XII,” Janetschek said on the call, adding that the fund entered its investment period on 1 January and began collecting fees.
A source familiar with the matter confirmed Americas XII has yet to hold a final close, but was unable to specify the expected closing date. The person added that the previous hard-cap was at $12 billion of third-party capital.
KKR declined to comment.
The New York-based private equity giant launched Americas XII at the end of 2015 with a target of $8 billion, as reported by sister title Private Debt Investor. The private equity behemoth renamed this fund – whose predecessors were named North America funds – to reflect its strategy targeting Latin America in addition to North America.
As previously reported by Private Equity International, this twelfth flagship fund offered a management fee waiver to investors committing to the fund in the first six months of fundraising, before the expected first close. It also offered reduced management fees to investors making large commitments to this fund. The fund has a 7 percent preferred return, deviating from the typical 8 percent hurdle.
According to the source, North America Fund XI is fully deployed, but has many active investments that will contribute to carried interest and investor returns.
NAXI launched in 2012 and raised $9 billion when it closed at the end of that year, as previously reported by PEI.
At press time, KKR’s stock was priced at $18.06 per share on the New York Stock Exchange, down 31 cents, or 1.61 percent, from the previous close.