Kohlberg Kravis Roberts (KKR)

Funds managed

Fund nameAsset ClassLicense
KKR INDIA DEBT FUND IPrivate Debt SEBI AIF Cat 2
KKR INDIA DEBT OPPORTUNITIES FUND IIPrivate DebtSEBI AIF Cat 2
KKR INDIA DEBT OPPORTUNITIES FUND IIIPrivate DebtSEBI AIF Cat 2
KKR India Real Estate Opportunities Fund – IReal EstateSEBI AIF Cat 2

Private equity funds are under Asia region as a whole, debt fund is discrete.

About the AMC

  • KKR & Co. Inc. is an American global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strategic partners, hedge funds
  • Assets under management: $4bln, including  $2bln private equity,  $1.5bln of credit & Real Estate and $500mln Infra business
  • Headquarters: New York, United States
  • CEO: Henry Kravis (1 May 1976–), George R. Roberts (1976–)
  • Parent organization: KKR Group Partnership L.P.
  • Founders: Henry Kravis, George R. Roberts, Jerome Kohlberg Jr.

Key staff

  • Sanjay Nayar (Partner & CEO)- Sanjay Nayar (Mumbai) joined KKR in 2009 and is a Partner and CEO of KKR India. He is also a Partner of the KKR Asia Investment Committee and KKR Asia Portfolio Management Committee. He also supports expanding the range of KKR’s credit and capital markets offerings across the region. Prior to joining KKR, Mr. Nayar served as CEO of Citigroup’s Indian and South Asian operations and as a member of Citigroup’s Management Committee and Asia Executive Operating Committee. Currently, he is a member of the board of SEBI’s NISM Board of Governors.Mr. Nayar serves on the Board of Emerging Markets Private Equity Association (EMPEA), Washington D.C; Indian School of Business (ISB); Advisory Board of Habitat for Humanity; Chairman of Grameen Impact Investments India (GIII); Founding Member of Brookings, India, and heads PE/VC Committee of the CII. Mr. Nayar was the deputy chairman of the Indian Banks Association (IBA).
  • Rupen Jhaver (MD, Private Equity)- Rupen Jhaveri (Mumbai) joined KKR in 2009 and has been a member of the India investing team since its founding. At KKR, he has led investments in Alliance Tires, Magma Fincorp, Dalmia Cement, Max Financial Services, Emerald Media, SBI Life Insurance, Bharti Infratel, HDFC and Ramky Enviro. Prior to joining KKR, he was with Goldman Sachs & Co. in its principal investment area and Warburg Pincus in Mumbai where he was involved in a number of investments including Mahindra & Mahindra, NDTV, Amtek Auto, Sigma Electric, Sintex, and Dainik Bhaskar. Mr. Jhaveri is a member of the Global Investor Council of Indian Private Equity & Venture Capital Association (IVCA). He holds a B.S., magna cum laude, from Leonard N. Stern School of Business of New York University.

They cite

Ways We Invest:

‘In addition to traditional management buyouts and build-ups, the business seeks to find opportunities to provide growth capital, as well as minority investments, and public toe hold investments where we can partner with public companies and leverage our industry expertise and operational capabilities.

Our Experience:

‘Throughout our history, we have consistently been a leader in the private equity industry, having completed private equity transactions with ~$620 billion of total enterprise value as of December 31, 2019.’

  • KKR’s Americas private equity platform invests across seven industry teams, including Energy; Financial Services; Healthcare; Industrials; Media & Communications; Retail and Consumer; and Technology sectors.
  • KKR’s Pan-Asia private equity portfolio is diversified by country, industry and sector, giving KKR the ability to pivot investment themes between both emerging and developed Asia. KKR focuses on long-term business fundamentals, looking for companies that are market leaders in their sectors and that would benefit from partnering with KKR for greater growth. Sectors they consider are – technology, financial services, media & telecommunications, consumer & retail, healthcare and industrials.
  • The European team operates in a matrix structure, combining deep local market knowledge and relationships with sector expertise across the five priority sectors of TMT, Consumer & Retail, Business & Financial Services, Industrials and Healthcare.

Investment Philosophy (for firm)

KKR’s Private Equity team has developed an extensive track record of partnering with management teams and entrepreneurs to build successful businesses across a broad range of industries and geographies.

As a global investment firm, they are differentiated by their:

  • Expertise in creating value
  • Stakeholder engagement
  • Experienced, stable, and deep investment team
  • Strong and consistent performance since the Firm’s inception
  • Global reach
  • Creativity and innovation
  • Deep industry knowledge and proprietary sourcing capabilities

Media

Title: KKR: What’s going wrong at the private equity firm, and how to fix it, Source: Forbes India, Date: 07 October 2019

https://www.youtube.com/watch?v=R-4h9r-txKI

In india size of the private equity has been increased, there has been a quite good amount of growth which has been seen in few years. KKR is the first global firm to launch private debt fund in India. Then they mentioned about the problem being there with the corporate governance  of the companies they have funded, they found problem with reporting.Talked about recovering capital from some of the companies. Planning to fund some companies wherein they acquire majority debt to control debt statistics, so that even if the company has to go through the bankruptcy process KKR should have significant say.

Title: How KKRIndia reached a debt fund, Source: Outlook Business, Date: 17 January 2020

https://www.magzter.com/article/Business/Outlook-Business/HOW-KKR-INDIA-REACHED-A-DEBT-END

In 2018, there were a total bad debts of $850m, which included Amtek, Kwality Dairy (smaller one comparitively), Avantha holdings and JBF Industries. Debt financing is only one of the three businesses of KKR in India, first has run into trouble recently, other verticals PE and Real Estate have done much better. Basically because KKR waited for company’s true potential to unfold  and started investing more aggressively which lead to huge bad debts.

Title: KKR infuses $150 million ‘confidence’ capital in India NBFC arm, Source: Economic Times, Date: 15 January 2020

https://economictimes.indiatimes.com/industry/banking/finance/kkr-infuses-150-million-confidence-capital-in-india-nbfc-arm/articleshow/73261690.cms?from=mdr

KKR is making a fresh equity commitment of $150 million, backing its wholesale non-banking credit arm KKR India Financial Services (KIFSL) that has been buffeted by rising bad loans in its portfolio, ratings downgrade, personnel changes, strategy overhaul and repayment pressures.

This is the second time the parent is infusing ‘confidence’ capital after putting in $100 million in 2009, when the PE group launched its credit business in India in what was then hailed as a pioneering strategy.Till date its other investors Abu Dhabi Investment Authority (ADIA) and Texas Teacher Retirement System have each infused $100 million.

Title: Shapoorji Pallonji Inks Pact with KKR to Sell 5 Solar Assets for about $204 Mn, Source: Saur Energy International News Page, Date: 27 April 2020

https://www.saurenergy.com/solar-energy-news/shapoorji-pallonji-inks-pact-with-kkr-to-sell-5-solar-assets-for-about-204-mn

The development came after months of negotiations between the two companies, and will likely to help Shapoorji Pallonji Group in reducing its debt burden.India is a key part of KKR’s Asia infrastructure strategy, and this transaction is its second investment in India as part of the strategy.

Title: Asia Pacific: A Critically Important Region, Source: KKR Blog, Date: 23 May 2019

https://www.kkr.com/global-perspectives/kkr-blog/asia-pacific-critically-important-region

Asia Pacific’s unique diversity, dynamism and explosive growth make it a critically important region in our global investment strategy. There are approximately 50 countries and territories, each with their own cultural, political, economic, environmental and religious landscapes. They state – ‘The region also accounts for a staggering 60% of the world’s economic growth. Up to 88% of the next billion entrants to the middle class by 2022 are projected to live in Asia, and their spending is forecasted to top $35 trillion by 2030.’

Title: KKR’s deal with Reliance Jio, Source: Economic Times, Date: 22 May 2020

https://economictimes.indiatimes.com/tech/ites/kkr-to-invest-rs-11367-crore-in-jio-platforms-for-2-32-stake/articleshow/75880793.cms

KKR is paying 113.7 billion rupees ($1.5 billion) for a 2.3% stake in Jio, becoming its fifth investor in a month, Ambani’s oil-and-gas giant Reliance Industries

“This transaction values Jio Platforms at an equity value of Rs4.91 lakh crore and an enterprise value of Rs5.16 lakh crore. This is KKR’s largest investment in Asia and will translate into a 2.32% equity stake in Jio Platforms on a fully diluted basis”.

Analyst questions

  • Being around 45 years into the industry, what evolutions have you noticed over the decades? (question can’t be put in reference to India)
  • How is your investment philosophy changed as compared to when you entered this industry?
  • What makes you stand out, specifically in PE business?
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