Private Equity Giant KKR Announces Special Situations Fund III

The new fund will focus on discounted distressed credit.

Private equity giant KKR & Co wants to raise $1.5 billion for its third special situations fund. 

Reuters reported the June registration of KKR Special Situations Fund III. The private equity firm said during its Q2 conference call that it planned to raise capital for a new special situations fund. The new fund plans to purchase discounted distressed debt, according to a report on Friday. 

Private Equity Giant KKR has Two Similar Funds

As noted, this is KKR’s third special situations fund. It closed its first fund at $2 billion in 2014. In 2016, it raised $3.35 billion for a second fund. Two notable investments by the firm’s special situations funds include guitar maker Gibson and Madrid-based pizza delivery company Telepizza.

With that said, Forbes produced a profile on KKR in May that referenced annual net returns of 3% or lower in special situations funds. 

About KKR Special Situations 

Meanwhile, KKR’s special situations strategy focuses on the capital structure in both privately negotiated transactions and in the secondary markets. Therefore, the company attempts to find strong risk adjusted returns from market dislocations. It also targets complex situations and distressed assets. 

[Related: Marquee Private Equity Investor Henry Kravis invests in alternative fun]

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