KKR Raises $711M For New TMT Fund

Dec 9 2016 | 12:45am ET

Global alternative investment manager KKR has raised $711 million for a new fund dedicated to growth equity investments in technology, media and telecommunications (TMT) sectors in North America, Europe and Israel.

The new fund, named the KKR Next Generation Technology Growth Fund, will concentrate on market-leading, high-growth companies, the company said, in secular growth areas with structured downside protection, limited leverage and will look to take on execution risk as opposed to fundamental technology risk. 

The new fund is expected to make equity investments of less than $100 million within the following themes: Business-to-Business Software/Software-as-a-Service, Information Technology Automation/Infrastructure, Security, Scalable Internet/Digital Media, and the Internet of Things, KKR said.

Beyond access to financial capital, KKR’s network of more than 100 current portfolio companies worldwide translates into over $7 billion in Information Technology spend and over $10 billion in marketing spend annually, the firm noted. 

The new fund is part of KKR’s TMT private equity platform, led by Herald Chen and Richard Sarnoff in the Americas and Philipp Freise in Europe. Leading the TMT Growth strategy is KKR new-hire David Welsh, a veteran in the TMT growth equity space who joined the KKR in October from Adam Street Partners.

“Our overall approach to TMT is to identify platforms – management teams, businesses, and sectors – where we can invest to build leading global TMT enterprises,” said Chen and Freise in a joint statement. “This strategy has served us well and we look forward to building upon it further by helping more entrepreneurs take their companies to the next level.”

The new reportedly received strong backing from a diverse group of new and existing global investors, including public and corporate pensions, family offices and high net worth individual investors. 

KKR has invested over $18 billion of equity in TMT-related private equity investments since 1983 and over $640 million in NGT-related growth equity investments since 2014. The firm as a whole is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. KKR had $131.1 billion in assets under management as of September 30, 2016.

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