KKR's Strategic Exit and the Private Equity Play in Enterprise Software

The private equity playbook has long emphasized disciplined exits as a cornerstone of value creation. KKR's recent $6.4 billion acquisition of OneStream by Hg-a deal that delivers a 4.5x return on its 2019 investment-exemplifies how private equity firms are increasingly capitalizing on undervalued public software companies, leveraging strategic flexibility and market dynamics to secure outsized gains. This case study not only underscores KKR's operational acumen but also highlights a broader trend in enterprise software, where AI-driven innovation and macroeconomic pressures are reshaping investment strategies.

A Case Study in Strategic Patience

KKR's journey with OneStream began in 2019, when it took a majority stake in the company at a valuation exceeding $1 billion. The firm's initial bet was rooted in OneStream's promise to unify financial operations-a niche but critical segment of enterprise software. By 2024, KKR had successfully taken OneStream public, raising $563.5 million in its IPO. However, the company's stock price subsequently declined by 35%, reflecting broader market skepticism toward public software firms amid macroeconomic volatility.

Rather than holding through the downturn, KKR executed a calculated exit in January 2026, selling its stake to Hg for $24.00 per share-a 31% premium over the closing price on January 5, 2026. This transaction, valued at $6.4 billion, translates to a 4.5x return for KKR, assuming its original investment cost basis. The exit aligns with KKR's long-standing philosophy of diversifying monetization strategies, as outlined in its insights: "Planning for an exit from the outset allows for a more diverse range of options, such as strategic sales or sponsor-to-sponsor transactions." By pivoting from public markets to a private equity buyer, KKR capitalized on Hg's deep expertise in software and its willingness to pay a premium for a company with a clear AI-driven roadmap.

The Broader Trend: Undervalued Public Software as a Target

OneStream's trajectory mirrors a growing trend in private equity: the acquisition of undervalued public software companies. From 2019 to 2026, the enterprise software sector faced headwinds, including inflation-driven cost pressures and shifting investor sentiment toward AI-centric startups. Public software firms, often burdened by quarterly earnings expectations, became vulnerable to strategic buyers willing to deprioritize short-term metrics in favor of long-term innovation.

KKR's exit from OneStream reflects this dynamic. As noted in its strategic rationale, the firm prioritized monetizing its stake once operational improvements were "complete," allowing it to secure a premium while avoiding the volatility of public markets. This approach is increasingly common in sectors like CFO software, where demand for AI-powered tools to streamline financial operations is surging. According to market analysis, the global CFO software market is projected to grow from $71 billion in 2023 to $131 billion by 2028, driven by the need for real-time analytics and automation.

Strategic Buyers and the AI-Driven Future

The OneStream deal also highlights the role of specialized private equity buyers like Hg. As a firm focused exclusively on software, Hg brings both capital and operational expertise to accelerate OneStream's AI-driven initiatives, such as its Sensible AI platform for automating financial tasks. This aligns with a broader shift in private equity toward sector-specific expertise, particularly in technology. According to KKR's insights, strategic buyers like Hg offer "the stability and capital needed to support long-term growth" in competitive markets.

Moreover, the transaction underscores the appeal of taking companies private during periods of market undervaluation. By removing OneStream from public scrutiny, Hg can prioritize long-term R&D and market expansion without the constraints of quarterly reporting. This flexibility is critical in AI-driven sectors, where innovation cycles often outpace traditional financial reporting timelines.

Conclusion: A Model for Future Exits

KKR's 4.5x return on OneStream is not an outlier but a harbinger of a larger trend. As private equity firms refine their strategies to exploit market cycles and sector-specific opportunities, undervalued public software companies will remain prime targets. The OneStream case demonstrates how disciplined planning, strategic flexibility, and a focus on AI-driven growth can yield exceptional returns-even in volatile markets. For investors, the lesson is clear: in the evolving landscape of enterprise software, the ability to pivot between public and private ownership may be the ultimate competitive advantage.