KKR: A global investment company with expanding assets and strong performance (Part 1 of 16)
Major player in private equity
KKR & Co. L.P. (KKR) is a global investment firm that manages funds for pensions, sovereign wealth funds, financial institutions, foundations, insurance companies, endowments, private banking platforms, family offices, and high net worth individuals (or HNWI).
Founded 37 years ago, KKR provides investment management services to fund investors or limited partners. The limited partners commit capital to private equity players in order to earn returns over and above the indexed returns. KKR also provides capital market services to its own firm, portfolio companies, and external clients.
The company manages the various funds under its private equity division. Over the years, it has expanded its product portfolio and is engaged in offering equity strategies, credit, special situations, capital markets, hedge fund solutions, infrastructure, and real estate solutions. KKR is currently managing more than $98 billion for its various clients spread around the globe.
Offerings and segments
KKR manages investment funds that invest for long-term capital appreciation either through strategic minority positions or through controlling the ownership of the companies. These funds invest across the sectors and regions. The company also manages funds and investment vehicles dedicated to real estate, infrastructure, and energy sectors. It classifies its business segment into the following:
- Private Markets. The Private Markets segment is a private equity business covering sector-specific and agnostic funds.
- Public Markets. The Public Markets segment covers credit and hedge fund businesses.
- Capital Market and Principal Activities. The Capital Market and Principal Activities segment is the financial advisory or investment banking division involved in advisory related to capital markets, underwriting of debt or equity issues, and so on.
KKR & Co. faces competition in the private equity business from major alternative asset managers such as The Blackstone Group (BX), The Carlyle Group (CG), and Apollo Global Management (APO).
Traditional asset managers such as BlackRock (BLK), BNY Mellon Asset Management (BK), and Franklin Resources (BEN) together make up 3.73% of the Financial Select Sector SPDR Fund (XLF). These funds have also expanded into private equity and hedge fund businesses.
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