US private equity firm Kohlberg Kravis Roberts & Co. (KKR) has announced plans to establish its first offices in the Asian region, opening up in Hong Kong and Tokyo. The move follows on the heels of a rumoured failed bid to acquire Samsung Life earlier this summer.
According to the world's largest buyout firm, it intends to pursue long-term opportunities in both emerging and well-established economies throughout the region. Business-wise, KKR will look to manufacturing, sourcing of products and joint venture opportunities for its portfolio companies, while also focusing on traditional buyout transactions in the region's more mature markets.
The establishment of regional offices will also allow KKR to look at cross-border acquisitions in partnership with Asian companies and selective growth equity investments in emerging markets.
In Hong Kong, KKR's on the ground footprint will be bolstered by the arrival of Joseph Bae, a managing director in its New York office, by the end of the year. Since joining KKR in 1996, Bae has focused his attentions on investments in the media and communications sectors and has played a role in KKR's investments in Jostens/Visant Corporation, PanAmSat Corporation, PRIMEDIA, Inc., Shoppers Drug Mart Corporation, Yellow Pages Group Co., and World Color Press, Inc. In addition to these transactions, he also holds board positions on Visant, PRIMEDIA and PanAmSat.
Outside of KKR, Bae also brings experience from Goldman Sachs in its principal investment area, where he was involved in a broad range of merchant banking transactions.
Joining him in the region will be Justin Reizes, a principal from its London office, who along with Bae, will spearhead the private equity firm's efforts in Asia Pacific.
"Our initial focus will be to build a world-class team of investment and operating professionals with direct experience in a range of Asian markets, including Japan, China and Korea," says Bae.
Additionally, KKR will boost its Asian business by appointing both veteran executives internally and hiring experienced local staff to develop its regional presence.
"The Asian markets will have a pivotal global influence in the coming decades and will offer significant investment opportunities for both KKR and our existing portfolio companies," says Henry R. Kravis, founding member of KKR. "As the role of private equity in Asia grows and is further defined, KKR will carefully assess the landscape and determine the most appropriate ways to be a leading participant in that process."
The opening announcement comes shortly after KKR's rumoured failed bid for South Korea's Samsung Life Insurance was rejected by creditor banks in August on the grounds of insurance investment limits. If successful, the potential $2.4 billion investment in Korea's top life insurer would have been KKR's first investment in the region.
Outside of Asia, the private equity firm, founded by Jerome Kohlberg, Henry Kravis and George Roberts, counts buyouts of RJR Nabisco in 1989 ($31.4 billion) and SunGard in 2005 ($11.3 billion) as its most notable transactions. Since its formation in 1976, the firm has completed over 130 transactions involving more than $157 billion in total financing.
"This initiative is a significant step in positioning KKR as a truly global private equity firm and will increase our competitiveness on a worldwide basis," comments George R. Roberts, founding Member of KKR. "After 29 years of successful private equity investing in over 130 transactions, KKR has the institutional expertise and, equally important, the institutional culture, to expand in a deliberate and meaningful way into an exciting new market."
