KKR: A Powerhouse in Private Equity and Beyond

KKR & Co. Inc. (KKR) is a leading global investment firm that has consistently demonstrated its ability to navigate complex markets and generate attractive returns for its investors. With a balance sheet of over $25 billion, KKR has the financial firepower to invest alongside its clients, seed new strategies, and take on strategic M&A opportunities. This strategic use of its balance sheet has enabled KKR to generate an attractive risk-adjusted return on equity, consistent with its fiduciary duties and one-firm approach.

One of the key factors contributing to KKR's success is its global, full-service capital markets business. This business offers tailored financing and execution solutions for every stage of a company's life cycle, supporting both KKR's portfolio companies and third-party clients in arranging financing for complex transactions. KKR's capital markets team works closely with the firm's investment professionals to provide customized financing solutions that align with the specific needs and goals of each company.

For instance, KKR provided a $1.7 billion financing package to support the acquisition of C&S Wholesale Grocers, a leading wholesale grocery distributor in the United States. This financing solution allowed KKR to acquire C&S Wholesale Grocers and implement operational improvements to enhance the company's performance. Similarly, KKR provided a €1.5 billion financing package to support the acquisition of a majority stake in the German logistics company, Deutsche Post DHL Group. This financing solution enabled KKR to acquire a majority stake in the company and implement operational improvements to enhance its performance.

KKR's global, full-service capital markets business also supports third-party clients in arranging financing for complex transactions. For example, KKR advised the French telecom company, Orange, on the sale of its Spanish tower business, Cellnex. KKR provided financing and advisory services to support the transaction, which resulted in a successful sale of the business to Cellnex for €2.2 billion.

Another critical aspect of KKR's success is its Capstone team, which drives trajectory-changing operational improvements in the firm's portfolio companies. The Capstone team partners with KKR's investment and company management teams to identify, underwrite, and drive operational improvements across various centers of excellence, including human capital, insurance, procurement, technology and cybersecurity, and supply chain efficiency, among others.

The Capstone team leverages KKR's one-firm culture and collective expertise to tailor operational improvements to the specific needs of each portfolio company. They also utilize KKR's extensive advisor network, which includes entrepreneurs and former C-suite level executives who act as an extension of the investment teams. This collaborative approach enables the Capstone team to drive operational improvements and create value for KKR's portfolio companies.

KKR's balance sheet strategy, global, full-service capital markets business, and Capstone team have all contributed to the firm's resilience and growth in recent years. By leveraging these capabilities, KKR has been able to help its clients navigate market volatility and identify investment opportunities across various asset classes and geographies.

In conclusion, KKR's ability to invest alongside its clients, seed new strategies, and provide tailored financing solutions, combined with its expertise in driving operational improvements, has positioned the firm as a powerhouse in the private equity industry. As KKR continues to evolve and adapt to the changing market landscape, it remains well-positioned to generate attractive returns for its investors and create value for its portfolio companies.