Kravis: Investors Flocking To Private Equity, Hedge Funds

Mar 16 2011 | 12:02pm ET

Hedge funds and private equity firms are among the biggest beneficiaries of the low-interest rate environment, according to one p.e. honcho.

Henry Kravis, on the eve of Kohlberg Kravis Roberts' first general meeting—the firm went public last year—said that investors are flocking to alternative investments in search of higher yields.

"With interest rates as low as there are, more and more institutions are moving up the risk spectrum," Kravis said at a New York investor conference. "There's more money being attracted to the alternative space."

Certainly, there's more money being attracted to KKR: Kravis said the firm raised $5.4 billion last year. More than a third of the new money came from new investors, with the number of limited partners at the firm growing by almost 100 institutional investors over the last five years.

Later this year, KKR plans to offer clients another place to put their high-yield-seeking capital when it launches its first long/short hedge fund, helmed by a team of former Goldman Sachs proprietary traders led by Robert Howard.

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