KKR corrals €4.5bn for European successor

Trumpeting what the firm describes as an overall 27% gross IRR, Kohlberg Kravis Roberts has wrapped up the fundraising for its second European vehicle, closing €1.5bn over target with the €4.5bn fundraise.

As expected, Kohlberg Kravis Roberts announced a €4.5 billion ($5.4 billion) final close for KKR European Fund II, the follow up to the firm’s $3 billion inaugural European fund raised in 1999. The new vehicle exceeded its initial target by €1.5 billion.

Johannes Huth, managing director, Kohlberg Kravis Roberts

In a joint statement, KKR founding partners and heads Henry Kravis and George Roberts alluded to the firm’s lengthy track record for its successful effort. “Since our founding in 1976, we have raised 11 funds, invested $22.5 billion in equity, and realized more than $50.7 billion for our limited partners,” they said. “Our gross IRR across all of our funds is 27.1 percent, representing a multiple of invested capital of 2.7 times.”

The New York-based firm has been making significant traction globally this year, with news coming last month that it will launch offices in Asia. The European focus, however, has been a staple for the group since the late nineties, when the firm started making significant headway in the summer of 1998 with the purchase of insurance brokerage Willis Corroon. More recently, the firm has notched acquisitions of Legrand, Royal Vendex and ATU among others, and last week, KKR finalised its purchase of SBS Broadcasting.

The close of the firm’s new European vehicle comes amid a shake-up at the firm in which Edward Gilhuly, along with Scott Stuart, left to launch a new investment group. Gilhuly, who has been credited with much of KKR’s success in Europe, had already moved back to the US last year, with Johannes Huth assuming his role as the head of KKR’s London office.

Last month, KKR further bolstered its European team with the hire of Christina Pamberg to head up the group’s European investor relations and co-investment duties. Pamberg came to KKR from fund-of-funds manager HarbourVest, where she was a vice president and participated in HarbourVest’s fundraising efforts and managed its secondary transactions.
According to the statement, KKR executives committed €100 million to the fund. The firm was able to recruit a number of new limited partners to the vehicle, which made up roughly 40 percent of the total funding. The fund maintains a global investor base, with limited partners coming from Europe, Asia, the Middle East and North America.

Linklaters served as legal counsel to the firm during the fundraising.