KKR has reached an $8 billion close on its sixth European fund—the biggest by a US firm to target the region—as it looks to further target digitization and demographic trends in the region.
The New York-headquartered firm is the most active European investor among the biggest US PE firms, having launched its first Europe-dedicated vehicle in 1999. This latest vehicle is 20% bigger than its predecessor, which closed at the end of 2019, and more than double the size of European Fund IV, which closed in 2015.
The fund close comes a month after London-based Permira‘s Fund VIII reached a $17.6 billion final close on its latest flagship fund, the second-largest buyout fund by a European manager.
Unlike Permira’s fund, which has a global mandate, KKR’s latest vehicle will focus on Western Europe, targeting companies trading on a significant discount to the US on an EV/EBITDA multiples basis.
The fund close comes amid a tighter fundraising environment. KKR put more than $1 billion of its own capital into European VI, representing over 12.5% of the fund’s total. This is far above the usual GP commitments, which tend to be between 1% and 5% of the fund.
However, according to PitchBook’s 2022 Annual Global Private Market Fundraising Report, experienced managers suffered less of a decline, accounting for 83.3% of total capital raised last year.
Philipp Freise, KKR’s co-head of Europe, said in a statement that the firm is seeking to invest in structural trends that are shaping the region’s economy including digitalization, and in sectors such as healthcare, the demand for which is being driven by Europe’s aging population. In an interview with Bloomberg, Freise said that by 2050, more than 45% of the population will be over the age of 55.
Some of KKR’s deals from its fifth European fund include its 2021 investment in software company Körber at a €1.5 billion valuation, and its 2020 acquisitions of beauty brands Clairol and Wella for $4.3 billion. The firm has also made some notable European investments through its other vehicles including its £4.2 billion buyout of UK’s Viridor Waste Management in 2020, and its $3.35 billion acquisition of Spanish fertility clinic chain Ivirma Global earlier this year.
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