KKR holds USD 8bn European Fund VI buyout fund close with 12.5%-plus GP commitment

Rachel Lewis
05 April 2023

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KKR has announced the final close for its sixth European buyout fund on USD 8bn, just over a year after the first close and with a USD 1bn commitment from its own balance sheet.

KKR European Fund VI held its first close in March 2022, according to a source familiar with the situation, after it was registered in May 2021.

The GP's large commitment is in line with its aim to be the single largest investor in all of its funds, said the same source.

However, it is one of KKR's largest commitments to one of its own private equity vehicles in recent years. It made an 8% commitment to its Next Generation Technology Growth Fund III (2022), 4% to Health Care Strategic Growth Fund II (2022), and 3% to its North America Fund XIII (2021), according to its most recent financial reports.

At current currency exchange rates, the fund is just over EUR 1.5bn (USD 1.65bn) larger than its predecessor, European Fund V, which held a final close in November 2019 on EUR 5.8bn.

Fund V had a gross IRR of 15% at Q4 2022, according to the financial reports. It has acquired German publisher Axel Springer and a minority stake in German supply chain software group Körber, alongside other deals.

Investors
The fund has seen external commitments from a mix of sovereign wealth funds, pension funds, banks, insurance firms, family offices, high-net-worth platforms, health services organisations and foundations, said the source.

Investments
The sixth iteration will deploy tickets or EUR 250m-EUR 750m in developed economies of Western Europe, in companies with an enterprise value of EUR 1bn-EUR 3bn.

The GP's investment strategy is flexible and can scale up or down based on the opportunity, said the source.

It will invest across KKR's core six sectors of TMT, consumer, business services, financial services, healthcare and industrials.

The investment strategy will follow that of its predecessor, said the source.

KKR declined to comment.

People
KKR - Philipp Freise, Mattia Caprioli (co-heads of KKR European Private Equity); Alisa Amarosa Wood (partner and Head of the Global Private Markets and Real Assets Strategies Group).

[Editor's note: The second paragraph has been amended to remove an incorrect mention of KKR European Fund VI's first close amount.]