Buyout kingpin Kohlberg Kravis Roberts & Co. is on the prowl for people who know how to select and manage infrastructure investments.
KKR hired Lazard's global infrastructure chief George Bilicic to lead the new initiative, the private equity firm said in a press release Friday. In addition, "KKR is building an investment team to focus specifically on global infrastructure opportunities and will work with Mr. Bilicic to identify highly experienced investment and operating executives in support of the initiative." New positions are expected to be created in Europe, Asia and the U.S.
Expanding on KKR's announcement, the Financial Times said the firm is rumored to be planning to raise $5 billion to invest in infrastructure - which would be among the largest of any fund in the sector.
Can't Live on Mega-Buyouts Alone
The step reflects a "tacit admission" that KKR has been slow to diversify away from its traditional focus on the largest leveraged buyouts, the FT says. That business has all but vanished since banks that used to happily finance the mega-billion dollar deals hunkered down amid the credit crunch.
Bilicic is joining the firm as a managing director and head of infrastructure, based in New York. He was with Lazard since 2002 and recently headed its efforts in the power, energy and infrastructure sectors. Among the deals he worked on was the $45 billion sale of TXU last year to KKR and TPG. He advised TXU on that deal, which set a record as the largest completed buyout ever.
Other key initial movers in KKR's infrastructure business will be:
- Johannes Huth, head of European operations at KKR
- Marc Lipschultz and Fred Goltz, co-heads of the energy, power and natural resources industry group
- John F. Bookout III and Clint Johnstone, senior advisors.
Huth, Lipschultz and Goltz will "oversee" the fund, KKR said. Bookout and Johnstone will work with Bilicic and the infrastructure team to choose and manage the portfolio. Bookout most recently led global industry practices including energy at McKinsey & Co., where he was a director of for 28 years. Johnstone was a long-time executive with Bechtel Group.
"Infrastructure is a multi-trillion dollar global marketplace with enormous need for private investment," KKR Co-Founders Henry R. Kravis and George R. Roberts said in the release. They called the planned fund a logical avenue for utilizing the firm's previous experience investing in large, complex and regulated businesses in a wide range of industries.