Professional Documents
Culture Documents
Development
Robert Lewin
James Rudy
July 17, 2012
Our balance sheet is significantly larger than those of our peers and provides us with a
number of competitive advantages
Ability to make sizable GP commitments to funds that we are raising, particularly 1st time funds
(Infrastructure, Mezzanine, Special Situations)
Seed capital for new strategies that we are incubating (hedge funds, real estate, royalties/PUDs)
Funding source for broker-dealer underwriting activities (KCM, NBFC India)
Anchor co-investments to support large private equity transactions (Samson)
Flexibility to invest in new businesses (Prisma)
Fundraising / Alignment of interests with LPs (we are our own largest investor)
Investment portfolio is heavily weighted to private equity due to legacy KPE investments, but
has diversified since the combination
Just over 80% private equity today vs. 97% at the time of the combination
$856
5,023
600
297
$6,775
$500
198
$6,077
$8.67
B/S Investments
8%
8%
1%
31%
52%
PE Funds
Energy/Infra
PE Co-Invest
KAM
Other
Sources of Liquidity
$2.3bn
$1.8bn
$750
Uses of Liquidity
$250
$100
Corporate
Revolver
$300
Minimum
Cash Balance
Other Items
$185
Liquid Seed
Capital
$1,650
$856
Cash
KCM Capital
Usage
Unfunded
Commitments
How does the Balance Sheet measure return on equity for new investments?
Risk adjusted by asset class
Tax-affecting returns
Place a premium on investments that meet following criteria:
1) 40 Act compliant
2) Generating a current yield
3) Investment is liquid
4) Diversification
Developed capital framework for all new commitments that seeks to capture above
considerations from a returns perspective
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Corporate Development
The Corporate Development function at KKR was created in 2011 in order to centralize
our efforts focused on M&A, strategic projects and corporate development initiatives
The Corporate Development team works in close coordination with each of KKR's
business units as we continue to look for opportunities to leverage our people, platform
and capital in order to accelerate growth
Over the past year, we have looked at a number of opportunities across nearly all of the
different business units within the firm
Last month, the firm announced its first ever acquisition of Prisma Capital Partners, an
$8 billion hedge fund of funds platform
Acquisitions and lift-out/bolt-on transactions will continue to be an important part of
our growth strategy going forward as we seek to scale many of our newer businesses
and enter new asset classes
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