KKR taps McKinsey executive for Brazil

Kohlberg Kravis Roberts’ new office in São Paulo will be led by Jorge Fergie, who worked on the private equity team at McKinsey & Company.

Kohlberg Kravis Roberts has appointed the head of McKinsey & Company’s Latin American private equity practice to lead the firm’s São Paulo office, the firm announced in a statement.

Jorge Fergie, who has been with McKinsey for almost 29 years, will join KKR as a managing director 1 March. The firm cited Fergie’s skillset as an advisor and executive, along with his experience supporting operational improvements, restructurings and privatisations as assets to KKR’s future effort in Brazil.

Fergie could not be reached for comment at McKinsey’s São Paulo office.

KKR opened its São Paulo office last year. In June, the firm named Henrique Meirelles – formerly the Governor of the Central Bank of Brazil – as a senior advisor to KKR’s expanding effort in Brazil and Latin America. Meirelles was reportedly KKR’s first hire in the region.

Brazil continues to be fertile ground for investment opportunities.

Henrique Meirelles

“Brazil continues to be fertile ground for investment opportunities,” Meirelles said in a statement. “Jorge is well-respected in the business community, and I look forward to continuing to build out a high quality and differentiated investment team in Brazil with him and the rest of KKR's global team to benefit Brazilian companies and KKR's investors.”

Fergie's early responsibilities in São Paulo will include assembling an investment team for the region. Although KKR does not have have a dedicated Latin American fund, the firm may deploy capital for Latin American deals through KKR North American XI Fund, which can invest up to 20 percent of its fund capital outside North America. 

Several firms, including 3iPartners Group and Pantheon have hired Latin American heads or opened offices in the region in the last two years.

KKR has actively marketed its funds in Latin America on several occasions over the years – the firm is one of the largest to attract interest from Chilean public pensions. KKR engaged Celfin Capital – now a subsidiary of BTG Pactual – to co-invest along with its 2006 flagship fund. Celfin also directed commitments to KKR’s 11th fund through a feeder fund structure launched in 2010.

Even with its successful forays into Latin American fundraising, KKR had not retained the local human capital many sources say is a prerequisite to investment in the region until recently. 

In his 2011 remarks at a conference in Santiago, Chile, KKR co-founder Henry Kravis indicated that firm would enter Latin America “in the next few years”, according to a Bloomberg report at the time.

“We like the demographics of Latin America, each country is different. Some countries’ prices are still frothy. We don’t know how long they will be frothy, and that is why we are preparing to enter,” Bloomberg reported Kravis as saying.

Since 2011, Latin America’s economy has slowed. After the region notched 6.2 percent gross domestic product growth in 2010, growth slowed to 4.5 percent and 3.1 percent over the next two years, according to International Monetary Fund data. While that still exceeds the US’ lacklustre growth over the same period, Latin America’s economies have not been as hot as some industry sources had speculated.