KKR & Co. (KKR:US), the private-equity firm run by Henry Kravis and George Roberts, has gathered about $4 billion to invest in infrastructure and energy deals as the firm looks beyond corporate takeovers.
KKR completed raising about $1 billion for infrastructure investments and $1.25 billion for natural resources, the New York-based firm said today in a statement. That’s combined with $1.3 billion in separate accounts for infrastructure, and $350 million for natural resources contributed by affiliates of KKR.
The firm and competitors Blackstone Group LP (BX:US) and Carlyle Group (CG:US) are raising money for investments outside of traditional leveraged buyouts as those deals remain elusive. LBOs dried up when the 2008 financial crisis froze credit markets, and private-equity firms have since moved to diversify by adding businesses that produce steadier income streams.
“These funds, which target attractive opportunities outside of the private-equity arena, benefit from our global footprint, extensive and deep resources and strong track record of investing in this space,” Marc Lipschultz, global head of the firm’s energy and infrastructure business, said in the statement.
KKR already has bought $950 million of oil and gas properties, including some in Texas and Louisiana sold by companies seeking to fund their own investments in areas such as shale exploration.
Announced private-equity deals this year have dropped 37 percent from the same period in 2011 to about $153.3 billion, according to data compiled by Bloomberg.
Created in 1976 by Kravis, Roberts and Jerome Kohlberg, KKR has roots in energy deals dating back more than two decades. Kravis and Roberts, who are cousins, had family in the natural- resources industry and grew up in Oklahoma and Texas, respectively.
KKR also has participated in some of the largest LBOs ever, including the 2007 takeover, with TPG Capital, of power producer TXU Corp., the biggest such deal. KKR has written the value of TXU, now called Energy Future Holdings, down to about 5 cents on the dollar, as of its most recent earnings report. Energy Future has reported five consecutive quarterly losses (TXU:US) as wholesale electricity prices dropped along with natural gas prices, according to data compiled by Bloomberg.
KKR has countered Energy Future’s declines with bets on natural gas and other energy investments. The firm last year bought Samson Investment Co., which owns interests in more than 10,000 oil and gas wells. At $7.2 billion, the Samson deal was the biggest buyout in 2011, according to data compiled by Bloomberg.
Last year, KKR and Hilcorp Energy Co. agreed to sell oil and gas leases in southern Texas to Marathon Oil Corp. (MRO:US) for $3.5 billion. The deal almost tripled the value of KKR’s $400 million investment in a year.
In infrastructure, KKR is seeking to seize on public and private assets in need of repair as well as alternative-energy efforts. That fund has invested in a French wind-power business and Saba Infraestructuras, a car park operator. Before the fund was formed, KKR bought a 23 percent stake in Colonial Pipeline Co., a deal completed in October 2010.
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