KKR Tees Up Credit Fund

Private equity giant Kohlberg Kravis Roberts & Co. will launch its first hedge fund at the end of the second quarter and will focus on buying loans and bonds in the secondary market while also providing direct lending.

  • 24 Feb 2006
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Private equity giant Kohlberg Kravis Roberts & Co. will launch its first hedge fund at the end of the second quarter and will focus on buying loans and bonds in the secondary market while also providing direct lending. A potential investor told Alternative Investment News, a CIN sister publication, that the KKR Strategic Capital Fund is expected to launch with $1 billion. A KKR spokeswoman declined to comment.

Nino Fanlo and David Netjes will manage the fund along with new staff the firm is hiring. The KKR fund will require a $5 million investment minimum and will have two separate investor classes. For Class A investors, the management fee will be 2% with a performance fee of 20% and a two-year lockup. For Class B investors, the management fee will be 1.5% and the performance fee is 15% with a five-year lockup. The prime broker is not yet known.

Many hedge funds have private equity investments as part of their portfolios, including Eric Mindich's Eton Park Asset Management and Alec Litowitz's Magnetar Capital. KKR, which has financed more than $162 billion worth of deals, is the biggest private equity name to move in the opposite direction. The Carlyle Group and Blackstone Group launched hedge funds at the end of 2004 with $3 billion and in 2005 with $500 million, respectively.

  • 24 Feb 2006

All International Bonds

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4 Goldman Sachs 235,165.28 784 5.99%
5 Barclays 229,116.44 888 5.84%

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1 HSBC 34,411.72 162 6.58%
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4 BNP Paribas 27,578.61 168 5.27%
5 SG Corporate & Investment Banking 23,982.83 136 4.59%

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3 Citi 15,750.21 93 7.17%
4 UBS 15,208.47 58 6.92%
5 Goldman Sachs 13,499.48 73 6.15%