Nov. 4 (Bloomberg) — KKR & Co. is seeking $5 billion to $6 billion by year-end for its next private-equity fund, according to two people with knowledge of the firm’s plans, an effort whose outcome may signal how competitors will fare in attracting new cash.
KKR, which has already gathered $4 billion for the fund, is aiming for a final target of about $10 billion, said one of the people, who asked not to be named because the information is private. The fund will focus on deals in North America.
The firm, based in New York, is trying to lure investors facing a barrage of pitches with terms it hasn’t offered on earlier funds, said the people. Clients will have the choice of a reduced asset-management fee or a greater share of fees levied on the companies in which the fund invests. The fund will have to meet a 7 percent preferred return hurdle before KKR can take its cut of investment profits.
“There are a large number of funds currently in the market as they need to raise follow-on vehicles,” said Kelly DePonte, a partner in San Francisco at Probitas Partners LP, which helps asset managers raise money. With stocks so volatile, some investors “are being cautious, though their issues are nowhere near as serious as they were at the end of 2008,” he said.