Bloomberg: KKR: $8 Bln Buyout Fund Is Sign of Confidence in Europe

KKR’s Europe co-head Philipp Freise discusses the firm’s largest-ever European buyout fund, giving the investment firm ammunition for deals at a time when private equity is navigating volatile markets. KKR raised fresh commitments of $8 billion, including more than $1 billion of that from its own balance sheet and employee commitments. Freise speaks on Bloomberg Television.

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Transcript

Eight billion dollars no small feat in a time when let’s be honest a lot of people are very worried right now where where is this demand coming from what do your investors look like good morning Danny first of all thank you for having me again and yes we are very excited to

Announce the closing of this new fund and we are excited about the quality of the investors behind it it’s brought its widespread and it’s a big sign of confidence in Europe yeah now you’ve got a big chunk of change to spend so where are you going to spend it where the

Opportunities well I think one of the reasons that people made the investment decision to invest in us and into a fund that’s 20 larger than the previous fund is because they’re excited about the strategy that we’re deploying uh here with with KKR Europe 6 which is We Believe Europe is undergoing a massive

Transformation right now our strategy is to partner with many of the companies that we invest in to help them not only with capital but to help them with expertise with Global Network and with lots of thematic um focus yeah I feel like I frequently have the conversation

Of use thing but the macro environment is so horrible why don’t you care why doesn’t it matter to you what does it mean to invest in a Europe right now that is undergoing stress that you are seeing more fears of recession how does that change your strategy well first of

All then you absolutely right I’ve invested through the great financial crisis the covets and this is as bad as it gets but our job as private Equity investors is to three see through the noise and really invest in the long term and private equity in general has always

Been strongest when time has been have been tough like this so where we see the opportunity is the long-term trends around digitization in Europe we have made a massive commitment to sustainability so the energy transition is of course a massive theme for us and also we are in aging Society so by 2050

More than 45 percent of the population in Europe will be older than 55 that’s up from 30 percent that’s a massive change so there’s a lot of Need for investment to make sure our Healthcare System are robust sheet into this fun how unique is that well one of the things that makes KKR

Unique is that we are the biggest investors in everything we do ourselves so indeed KK is one of our large investors in this fund and it’s we believe it’s a model that really aligns us with our LPS it aligns us with anyone in KKR as you know our culture is really

Special in the sense that everybody is helping each other I’m just here in Europe you know the person who’s standing on the shoulders of you know the largest private Equity found in Asia The Firm that founded private equity in the US and that’s what Europeans are

Interested in they want me to bring the full breath of the platform and for that I need alignment and that’s what this does so so perhaps momentum fundraising for you hasn’t slowed but if you look at at private Equity as a whole fundraising goals have fallen uh 18 trillion this

Year is where Bloomberg data pins it that’s down from two trillion uh sorry 8 trillion down from 2 trillion last year has momentum stalled in terms of the whole industry have we reached a peak in terms of fundraising or is this just a blip and things continue at a different

Pace next year look it’s tough out there and there’s no denying that some people were killing themselves thinking that the velocity of deployment of funds was shortening that the industry was in a never-ending golden boom that’s not the case what’s happening is we have to go back to the hard work of finding

Proprietary deals of bringing more than just Capital to the companies and differentiation so what you see today is a sign of confidence in what KKR does in what our team frankly does but it’s not like anybody going out there raising a big fund will be successful there will be more differentiation

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