KKR Aims for $20B with New Private Equity Fund

KKR is aiming to raise approximately $20 billion for its new private equity fund, North America Fund XIV. This initiative comes three years after launching its previous fund of a similar size. 

The fundraising campaign, which began marketing to investors earlier this month, targets a net internal rate of return (IRR) of at least high-teens and aims for a steady annual deployment of 20% to 25% of its capital.

The fundraising environment for buyout funds became more challenging due to high interest rates and reduced capital returns from private equity firms. Despite these challenges, KKR remains optimistic. 

The firm’s last North American private equity fund, launched in 2017, achieved a net IRR of 20.5% as of March. This performance surpasses rival funds from Carlyle Group and Bain Capital, which reported net IRRs of 8% and 17.1%, respectively.

KKR’s previous fund, North America Fund XIII, already deployed 64% of its capital within three years of its six-year investment period. KKR has also been committed to offering equity to rank-and-file employees of its portfolio companies in North America, a move that has reportedly led to higher revenue, improved productivity, and lower turnover. 

For more information, read the full article on Reuters.