KKR launches unit focused on impact investing-sources

China Modern Dairy Holdings

26/04/2018 21:25

By David French and Joshua Franklin
    April 26 (Reuters) - KKR & Co LP  KKR.N  has set up a
business to invest in budding companies which have societal or
environmental benefits, marking the U.S. private equity firm's
foray into dedicated so-called impact investing, sources aware
of the plans said.
    The move underscores how buyout firms, long associated with
saddling companies with debt and slashing costs and jobs, are
now seeking to offer products to investors that also appeal to
an environmental, social and governance (ESG) business agenda.
    KKR's new unit will seek investments in smaller medium-sized
companies focusing on areas such as renewable energy, education
and environmental management, according to one of the sources,
who spoke on condition of anonymity as the information is not
public.
    KKR's approach will be to make private equity-style
investments in these companies, with the aim of building up
businesses and earning a profit from a future sale comparable to
traditional buyout fund returns, the sources said.
    The new fund, which has investment themes tied to the United
Nations' Sustainable Development Goals, does not have an
identified size, but is currently engaging with potential
investors about contributing to it, three of the sources said.
    The business will be run by Robert Antablin, previously
KKR's head of energy private equity for the Americas, and Ken
Mehlman, KKR's global head of public affairs, the sources said.
    Antablin will move to New York from Houston under the new
role, one of the sources said. His responsibility for energy
private equity investments had moved earlier this year to David
Rockecharlie, the firm's head of energy real assets, another of
the sources added.
    A spokeswoman for KKR, whose assets under management totaled
$168 billion at the end of 2017, declined to comment.
    Other private equity firms are beginning to launch similar
offerings focused on investors' social responsibility agenda.
TPG Capital's $2 billion Rise Fund, for example, invests in five
areas including agriculture and education, and counts musician
and activist Bono as a founding stakeholder.  urn:newsml:reuters.com:*:nL8N1K10ZU
    KKR has made investments in the past that fit into the
profile of companies its new fund would target, such as China
Modern Dairy Holdings  1117.HK , which sells higher-end dairy to
the country's growing middle class when milk standards have been
questioned.

 (Reporting by David French and Joshua Franklin in New York;
editing by G Crosse)
 ((davidj.french@thomsonreuters.com; +1-646-223-5211; Reuters
Messaging: davidj.french.thomsonreuters.com@reuters.net))