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KKR ‘continues to pursue secondaries’ strategy amid firm build-out

The private equity giant is looking at opportunities to acquire secondaries firms or set the unit up organically, according to co-president and co-COO Scott Nuttall.

KKR, the world’s third-largest private equity firm according to the PEI 300, is still in the “analysis” phase of entering the secondaries market, according to its co-president and co-chief operating officer.

“On the secondaries side, as we have mentioned in the past we continue to look at the space,” Scott Nuttall said during the firm’s first-quarter earnings call on Tuesday. He was responding to an analyst’s question about where the private equity giant is in building its secondaries platform.

“We are analysing whether we want to build or whether there is something that might make sense to buy,” he added. “It’s really hard to have the buy-in work from a fixed standpoint in time.”

There will be more details to share on the strategy in time and KKR continues to pursue it, Nuttall said. He had said in prior earnings calls and on the firm’s Investor Day in March that KKR is looking at the right way to enter and grow in secondaries.

Several firms including Manulife, BlackRock and TPG have added secondaries capabilities in recent years, either by acquiring teams or by taking stakes in secondaries managers. Last month, Apollo Global Management launched a credit secondaries business and said it will have $1 billion to deploy, backed by the firm’s insurance clients. It expects to raise a dedicated third-party fund. BlackRock, meanwhile, gathered more than $3 billion for its debut Secondaries & Liquidity Solutions Fund in March.

KKR’s total capital invested came in at $7 billion for the quarter and $31 billion over the last 12 months, up over 30 percent over the prior period.

The firm expects to raise more than $100 billion of new capital commitments over the next two years, according to its Investor Day presentation materials. Almost half that figure is expected to come from PE fundraising, up to $20 billion in infrastructure, up to $15 billion in real estate and up to $25 billion in credit.

– This is a shortened version of a story on KKR’s Q1 2021 earnings call which appears on affiliate title Private Equity International.