KKR bolsters European buyout fund

Anneken Tappe
31 January 2013

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KKR is reportedly set to use uninvested capital to back its second European buyout fund, while extending the fund's life span, according to reports.

Equity will be drawn from the uninvested capital of KKR European Fund II Annex Fund, limited to about half of the residual money. The GP is also said to have reinvested in struggling portfolio companies since the onset of the financial crisis.

KKR's second European buyout fund closed on €4.5bn in November 2005, €1.5bn above target. Its life span was prolonged by one year. According to the company's September results, the fund has a net IRR of 1.7%. In June 2009, KKR wrote the fund's value down from $5.8bn to $2.8bn. The Annex Fund closed €150m below target on €400m in August 2009. Investors in the support vehicle were guaranteed the first 20% IRR on each deal.

In addition, the GP is looking to refocus its third European fund, allowing investments in Africa as well. KKR European Fund III closed €1.2bn below target on €4.8bn in June 2008.