Side Letter: Apax gets into impact, KKR’s $100bn goal

A strategy launch scoop on one of Europe's most prominent PE firms, plus the asset class breakdown for KKR's 2022 fundraising goal. Here's today's brief, for our valued subscribers only.

They said it

“Valuations will continue to be high in good deals, which is why the high quality of sourcing is essential.”

Philippe Poletti, head of Ardian Buyout, talks to PEI about the importance of proprietary deal processes for the firm’s latest fund, which closed on €7.5 billion.

Just happened

Apax and impact
The shift to impact investing continues: affiliate title New Private Markets reported yesterday that buyout stalwart Apax Partners is about to break into the strategy. The firm is hiring a partner from Africa-focused Helios Investment Partners to co-lead an impact-focused fundraise (registration required). As and when it does, it will join a raft of established buyout and multi-strategy firms to raise capital or build teams to focus on the burgeoning strategy.

KKR’s 2022 fundraising goal
KKR is eyeing more than $100 billion of new capital commitments over the next two years, according to materials from its Investor Day 2021 yesterday. As much as half of the figure is expected for its private equity funds; between $15 billion and $20 billion in infrastructure; up to $15 billion in real estate and up to $25 billion in credit. 2020 was already a record fundraising year for the firm, in which $44 billion was gathered across strategies, representing a 72 percent increase from 2019.

KKR has 23 different fundraisings and strategies that are in market or coming to market shortly over the course of 2021 and 2022, Scott Nuttall, co-president and co-chief operating officer, said during the presentation. Among the firm’s funds in market are its 13th North America-focused fund, which has an initial $14 billion target, and its second healthcare growth fund, which had an initial set of closes on $2.8 billion. In the next 12-18 months, the firm expects to begin raising capital for its sixth Europe buyout fund, its third growth tech fund, its inaugural Asia growth tech fund and its sophomore impact vehicle, among others, said co-president and co-chief operating officer Joe Bae.

Essentials

WFH gives firm confidence to go global
Does it really matter if your partner is in an office next door or 5,000 miles away if technology connects you in less than a second? The experience of working from home has some GPs answering “no”. Icon Ventures GP Michael Mullany has relocated from San Francisco to his native Ireland, where he will work from home while spearheading the firm’s expansion into Europe. “Expanding our geographic footprint wasn’t on our radar screen this year until we saw how efficient we can do it under covid conditions,” said Joe Horowitz, Icon’s managing general partner. “We had been thinking about Europe for a long time and the pandemic accelerated that decision. Working in a pandemic has got us all quite comfortable using Zoom while staying home, while still building new relationships and working with our portfolio.” Read more at affiliate title Venture Capital Journal (registration or subscription required).

New hire suggests Palladium has eye on new fund
Mid-market investor Palladium Equity Partners has hired Erick Bronner as managing director of fundraising and investor relations, reports affiliate title Buyouts. Bronner previously led global fundraising and IR activities at Riverside Company, where he worked for more than nine years. His hiring could be a sign Palladium will be heading back to market with its sixth fund. The New York firm closed on $1.56 billion for Fund V in 2019. It declined to comment on its fundraising plans. Read more here (registration or subscription required).

Dig deeper

Institution: Maine Public Employees Retirement System
Headquarters: Augusta, US
AUM: $16.7 billion
Allocation to alternatives: 46.1%

Maine Public Employees Retirement System has confirmed $168 million-worth of commitments across three private equity funds, according to a contact at the pension.

The commitments comprised €40 million to Charterhouse Capital Partners XI, $45 million to Hellman & Friedman Capital Partners X and $75 million to Pathlight Capital Fund II. Maine PERS has a 15 percent target allocation to private equity that stands at 17.6 percent.

The $16.7 billion public pension’s previous private equity commitments have targeted a variety of vehicles, from US-focused co-investment vehicles to global buyout funds.

For more information on MainePERS, as well as more than 5,900 other institutions, check out the PEI database.


Today’s letter was prepared by Lawrence Aragon with Adam Le and Carmela Mendoza.