Kohlberg Kravis Roberts has joined forces with another private equity firm to launch a $300 million middle-market investment-banking business.
KKR and Stone Point Capital each kicked in $150 million to KKR-SPC Merchant Advisors. The new firm will be run initially by KKR's capital markets business, and both firms will be equally represented on its board of directors.
Merchant Advisors will target middle-market and private-equity-backed companies, offering both debt and equity underwriting services. KKR said the company could eventually grow to provide risk management and fundraising services, as well.
Stone Point's investment comes from its Trident V fund.
"The financial services industry is going through unprecedented change that is creating challenges for companies to conduct business," Stone Point co-founder Chuck Davis said. "We see an opportunity for an independent capital markets business that is willing to take on principal risk and allow its clients to pursue their growth and business development initiatives."