Private Markets
Through our Private Markets segment, we manage and sponsor a group of private
equity funds and co-investment vehicles that invest capital for long-term appreciation,
either through controlling ownership of a company or strategic minority positions.
We also manage and sponsor a group of funds and co-investment vehicles that
invest capital in real assets, such as infrastructure, energy and real estate.
These funds, vehicles and accounts are managed by Kohlberg Kravis Roberts &
Co. L.P., an SEC registered investment adviser.
Private Equity
We invest in industry-leading franchises and attract world-class management
teams. Our investment approach leverages our capital base, sourcing advantage,
global network and industry knowledge. It also leverages a sizeable team of
operating consultants, who work exclusively with our investment professionals
and portfolio company management teams and otherwise at our direction, as well
as senior advisors, many of whom are former chief executive officers and leaders
of the business community.
Public Markets
We operate and report our combined credit and hedge funds businesses through
the Public Markets segment. Our credit business advises funds, CLOs, separately
managed accounts, and investment companies registered under the Investment Company
Act, including a business development company or BDC, undertakings for collective
investment in transferable securities or UCITS, and alternative investments
funds or AIFs, which invest capital in (i) leveraged credit strategies, such
as leveraged loans, high yield bonds and opportunistic credit, and (ii) alternative
credit strategies such as mezzanine investments, direct lending investments,
special situations investments and long/short credit investment strategies.
The funds, accounts, registered investment companies and CLOs in our leveraged
credit and alternative credit strategies are managed by KKR Credit Advisors
(US) LLC, which is an SEC-registered investment adviser, KKR Credit Advisors
(Ireland), regulated by the Central Bank of Ireland, and KKR Credit Advisors
(UK), regulated by the United Kingdom Financial Conduct Authority, or FCA. KKR
Credit Advisors (Ireland) and KKR Credit Advisors (UK) (formerly known collectively
as Avoca Capital) were acquired by KKR on February 19, 2014.
Hedge Funds
Our hedge fund business is comprised of customized hedge fund solutions and
minority interests in other public markets managers and funds. We established
our hedge fund business in October 2012 with the acquisition of Prisma Capital
Partners LP through which we provide customized hedge fund portfolio and hedge
fund-of-fund solutions. We expect to grow this business with the acquisition
of majority and minority interests or stakes in third party hedge fund management
companies or by seeding strategies with strategic hedge fund partners.
Capital Markets
Our Capital Markets segment is comprised primarily of our global capital markets
business. Our capital markets business supports our firm, our portfolio companies
and third-party clients by developing and implementing both traditional and
non-traditional capital solutions for investments or companies seeking financing.
These services include arranging debt and equity financing for transactions,
placing and underwriting securities offerings and providing other types of capital
markets services. When we underwrite an offering of securities or a loan on
a firm commitment basis, we commit to buy and sell an issue of securities or
indebtedness and generate revenue by purchasing the securities or indebtedness
at a discount or for a fee. When we act in an agency capacity, we generate revenue
for arranging financing or placing securities or debt with capital markets investors.
We may also provide issuers with capital markets advice on security selection,
access to markets, marketing considerations, securities pricing, and other aspects
of capital markets transactions in exchange for a fee. KKR Capital Markets LLC
is an SEC-registered broker-dealer and a FINRA member, and we are also registered
or authorized to carry out certain broker-dealer activities in various countries
in North America, Europe, Asia-Pacific and the Middle East. Our third party
capital markets activities are generally carried out through Merchant Capital
Solutions LLC, a joint venture with one other unaffiliated partner, and non-bank
financial companies, or NBFCs, in India.