Kohlberg Kravis Roberts has acquired a 9.7 percent stake in German football club Hertha BSC, according to a statement.
Hertha is a German association football club based in Berlin and founded in 1892. The minority stake comes as part of an investment of €61.2 million by KKR Asset Management, the firm’s credit arm that invests in stable companies whose capital structure is under pressure. KKR made the investment from its $2 billion Special Situations Fund that closed last month of $2 billion.
Hertha will use the investment to pay down debt, buy back rights the company recently sold, including catering rights, and create a liquidity base for managing future costs. The investment has a minimum holding period of 7 years, during which time KKR will assist Hertha with issues including marketing and advertising but will not be involved in sporting decisions.
European investment firm IM 1872 initiated the partnership between KKR and Hertha, the statement said. KKR was attracted to Hertha in part due to the “significant potential of strengthening the club's position both at home and abroad,” Johannes Huth, head of KKR Europe, said in the statement.
KKR's Special Situations Fund collected roughly double its $1 billion target. The fund makes “distressed and event-driven investments” globally, hoping to gain strong risk-adjusted returns from market dislocations, complex situations and distressed assets, according to a statement . Prior to raising the fund, KKR’s special situations unit invested via separate accounts and has invested about $2 billion in Europe over the past two years.
KKR Asset Management invests in strategies such as high-yield corporate debt and has about $20.9 billion of assets under management.