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KKR sets cap of $15.5bn for 2006 Fund

The buyout giant, currently in the market with its 2006 Fund, has set a ceiling for the vehicle that, if reached, will put KKR in the same size stratosphere as Blackstone and Texas Pacific.

Kohlberg Kravis Roberts has set a cap of $15.5 billion (€12.4 billion) for the ongoing fundraise of its KKR 2006 Fund, according to a source.

According to several sources, the firm had planned to hold a first close for the vehicle this month, although this has not been confirmed.

KKR declined to comment on the fundraising.

If the firm reaches its stated target, it will be in the same size league as The Blackstone Group and Texas Pacific Group, both of which are putting the final touches on vehicles, each of which have attracted roughly $15 billion in commitments, although several conflicting reports have assigned varying numbers to these fundraises. Similarly, several limited partner sources say they are unaware of the exact totals being sought by these groups.

In seeking these eye-popping capital commitments, KKR is touting to potential LPs a cumulative net IRR of 20.9 percent across the firm’s first 10 funds. The New York firm was founded in 1976. A private equity advisor to institutional investors described KKR’s long-term track record as “really good”.

The performance of the firm’s most recent fund, the KKR Millennium Fund, which began investing in 2002, is particularly impressive, with underlying assets that are now estimated to be worth more than four times cost.

Bolstering KKR’s ongoing fundraising effort are two billion-plus commitments from the state pensions of Washington and Oregon, respectively, and a roughly $2 billion commitment from KKR Private Equity Investors, a $5 billion vehicle recently listed on the Euronext Amsterdam exchange.