KKR Prisma and PAAMCO will combine to form a new firm, PAAMCO
Prisma Holdings, which will have over $30 billion in assets
The combined business will be majority employee-owned with
employees of PAAMCO and KKR Prisma owning 60.1% of the combined
business and KKR retaining a 39.9% ownership stake as a long-term
The combined business will be jointly run by Jane Buchan,
co-Founder and CEO of PAAMCO, and Girish Reddy, co-Founder of KKR
Prisma and Head of KKR Hedge Funds
IRVINE, Calif. & NEW YORK--(BUSINESS WIRE)--
KKR and Pacific Alternative Asset Management Company, LLC ("PAAMCO")
today announced that they have entered into a strategic transaction to
create a new liquid alternatives investment firm by combining PAAMCO and
KKR Prisma. Under the terms of the agreement, the entire businesses of
both PAAMCO and KKR Prisma will be contributed to a newly formed company
that will operate independently from KKR, and KKR will retain a 39.9%
stake as a long-term strategic partner.
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This transaction will bring together two leading brands to create one of
the largest firms in the liquid alternatives industry, with over $30
billion of assets under management or advisement and the ability to
fulfill a broad range of liquid alternatives needs. Founded in March
2000, PAAMCO is a leading private institutional investment firm with $24
billion of assets under management or advisement dedicated to offering
alternative investment solutions. KKR Prisma, with approximately $10
billion of assets under management, constructs and manages customized
hedge fund portfolios and other products across the spectrum of liquid
The combined business will operate under the new global brand, PAAMCO
Prisma Holdings, with PAAMCO and KKR Prisma's core investment and client
teams remaining unchanged. The Prisma and PAAMCO brands and funds will
continue to exist side-by-side in their current separate form. The
combined enterprise will have all of the features their clients have
invested in historically but with the additional benefits of operational
scale and access to an even broader suite of investment solutions.
Jane Buchan, co-Founder and CEO of PAAMCO, said: "As the alternatives
industry continues to evolve, expanding our reach will further enhance
our ability to innovate and to provide leading solutions to our clients.
This transformative step will enable us to provide added scale benefits,
wider investment options and faster innovation to all of our investors.
Organizationally, we are excited by how well Prisma's investment
franchise complements our own, and by the possibilities that KKR brings.
I look forward to working with Girish to capitalize on the experience
and expertise of our combined teams to continue to deliver compelling
and value-added solutions to our clients."
Girish Reddy, co-Founder of KKR Prisma and Head of KKR Hedge Funds,
added: "Joining forces with PAAMCO will enable us to better serve our
clients' evolving investment requirements. I believe greater scale,
flexibility, and additional resources will enhance our ability to
generate strong investment performance and to build and service bespoke
solutions for our clients. Additionally, we look forward to continuing
our strong partnership with KKR."
Henry Kravis and George Roberts, co-Founders and co-Chairmen of KKR,
stated: "We are bringing together two leading names to create an even
stronger liquid alternatives firm. The decision to combine KKR Prisma
with PAAMCO is based on our shared view that a larger enterprise with
exceptional resources, technology and investment acumen will be even
better positioned to support clients in today's marketplace."
The transaction is not a monetization event for PAAMCO or Prisma's
current management or for KKR. Under the terms of the agreement, the
entire businesses of both PAAMCO and KKR Prisma will be contributed to a
newly formed company. The new business will be led by co-CEOs Jane
Buchan, co-Founder and CEO of PAAMCO, and Girish Reddy, co-Founder of
KKR Prisma. As part of the transaction, the combined entity is expected
to enhance alignment with investors by re-equitizing the management team
and retiring PAAMCO's existing minority owner. The combined business
will be majority employee-owned with employees of PAAMCO and KKR Prisma
owning 60.1% of the combined firm and KKR retaining a 39.9% ownership
stake. PAAMCO Prisma will be a strategic investment for KKR and will not
be a portfolio company in a KKR fund. KKR Prisma and PAAMCO investment
solutions, investment processes, investment teams, client service teams
and regional presence will remain as is at closing.
Subject to the satisfaction of customary closing conditions, including
the receipt of requisite regulatory approvals, the transaction is
expected to close in the second quarter of 2017.
Pro forma for this transaction, and based on financial information as of
September 30, 2016, KKR's hedge fund strategic partnerships would have
approximately $74 billion in assets under management or advisement in
the aggregate, of which KKR's pro rata share would be approximately $24
billion in assets under management or advisement.
KKR was advised by Simpson Thacher & Bartlett LLP, and PAAMCO was
advised by Moelis & Company LLC and K&L Gates LLP.
KKR is a leading global investment firm that manages investments across
multiple asset classes including private equity, energy, infrastructure,
real estate, credit and hedge funds. KKR aims to generate attractive
investment returns by following a patient and disciplined investment
approach, employing world‐class people, and driving growth and value
creation at the asset level. KKR invests its own capital alongside its
partners' capital and brings opportunities to others through its capital
markets business. References to KKR's investments may include the
activities of its sponsored funds. For additional information about KKR
& Co. L.P. (NYSE:KKR), please visit KKR's website at www.kkr.com
and on Twitter @KKR_Co.
PAAMCO, which manages over $10 billion in discretionary assets and
advises on an additional $14 billion in assets, is a leading
institutional investment firm dedicated to offering alternative
investment solutions to the world's preeminent investors. Since its
founding in 2000, PAAMCO has focused on investing on behalf of its
clients while striving to raise the standard for industry-wide best
practices. Headquartered in Irvine, California with a global footprint
that extends across North America, South America, Europe and Asia,
PAAMCO's clients include large public and private pension funds,
sovereign wealth funds, foundations, endowments, insurance companies and
financial institutions. The firm is known for its completeAlpha™
approach to hedge fund investing which focuses on delivering performance
from early-stage opportunities, controlling costs and protecting client
assets. In addition, it offers long-only active equity investing in
emerging markets through its PAAMCO Miren division as well as active
Fixed Income solutions through PAAMCO Horizons.
Forward Looking Statements
Certain matters discussed in this release constitute forward-looking
statements within the meaning of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements relate to expectations, beliefs, projections, future plans,
anticipated events and similar expressions concerning matters that are
not historical facts. The forward-looking statements are based on the
parties' respective beliefs, assumptions and expectations of their
respective future performance and future events, taking into account
information currently available to them. These beliefs, assumptions and
expectations can change as a result of many possible events or factors,
not all of which are known to the parties or are within their control.
The following factors, among others, could cause actual results to vary
from the forward-looking statements: the ability of the parties to
satisfy the conditions precedent and consummate the proposed transaction
(including but not limited to the receipt of all required regulatory
approvals), the timing of consummation of the proposed transaction, the
ability to achieve any of the anticipated benefits from the transaction,
risks related to disruption of management's attention due to the
transaction, and the various risks associated with the parties'
respective businesses. No party undertakes any obligation to update any
forward-looking statements to reflect circumstances or events that occur
after the date on which such statements were made except as required by
View source version on businesswire.com: http://www.businesswire.com/news/home/20170206005970/en/
Steve Bruce / Mary Beth
Hirst, +44 (0)7880 742 375
Kristi Huller/Cara Kleiman
Craig Larson, 212-750-8300
Source: KKR & Co. L.P.
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