KKR & Co. (KKR:US), the private-equity firm led by George Roberts and Henry Kravis, agreed to buy a stake in hedge fund BlackGold Capital Management LP as it continues to grow beyond buyouts, said a person with knowledge of the deal.
KKR will take a 24.9 percent stake in Houston-based BlackGold, which makes credit investments in energy-related companies and assets, said the person who asked not to be identified because the transaction hasn’t been announced. KKR will share in BlackGold’s earnings, which include fees for managing money and for producing profits, the person said.
Kristi Huller, a spokeswoman for New York-based KKR, declined to comment. A telephone message left at BlackGold outside of normal business hours wasn’t returned.
KKR, like competitors Blackstone Group LP (BX:US) and Carlyle Group LP (CG:US), has diversified its business beyond leveraged buyouts, in part by acquiring stakes in hedge-fund firms. Blackstone in February did its first such deal, using client funds to buy a piece of Senator Investment Group LP. Carlyle owns stakes in hedge-fund firms Claren Road Asset Management LLC, Emerging Sovereign Group LLC and Vermillion Asset Management LLC. KKR’s agreement with BlackGold is its second such deal, after the firm took a stake in Nephila Capital Ltd. last year.
KKR hasn’t had as much success in its own hedge funds. In May it liquidated a $510 million stock-focused fund run by former Goldman Sachs Group Inc. (GS:US) trader Bob Howard. KKR had given Howard, who joined in 2010, $100 million to start the vehicle, according to marketing documents.
KKR, Blackstone and Carlyle also manage funds of funds, which allocate client money to other hedge-fund firms. Blackstone’s hedge-fund business, run by Tom Hill, is the world’s biggest, with more than $58.3 billion in assets. Hill in February said Blackstone intends to “dominate” the practice of buying stakes in hedge-fund firms.
BlackGold was started in 2006 by Erik Dybesland and Adam Flikerski and has done deals valued at more than $2 billion, according to its website.
The Wall Street Journal was first to report the purchase.
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