Kohlberg Kravis Roberts (NYSE:KKR), better known as KKR, has reached a conclusive standpoint on its decision to buy Prisma Capital Partners. The private equity group has agreed to buy Prisma Capital. The latter is renowned for its illustrious fund-of-fund strategy and will increase KKR’s group assets by 10%.
Prisma will carry on with operations under its brand. Nonetheless, it will rest under KKR’s public market segment’s umbrella. The financial dynamics surrounding the deal are yet to be disclosed. Henry Kravis commented on the deal by emphasizing on the ballooning need for liquid alternative investment products. He went on to add that KKR believes that customized hedge fund solutions were instrumental in quenching the fast growing need. Among some of the notable names that have surfaced in the Prisma deal is former Goldman Sachs Group, Inc. (NYSE:GS) trader Robert Howard. He joins the list of other Goldman Sachs alumni like Ralph Rosenberg and Suzanne Donohoe.
Looking back into KKR’s track record, it comes of note that the private equity group was more inclined towards using debt to make profit than it was to its current method. KKR was typical of acquiring companies on debt and selling them on profit. This tactful strategy however came to an end at the wake of the dreaded 2008 financial crisis. As per now, KKR seems be part a bandwagon effect already too familiar with bigger competitors like Carlyle group and The Blackstone Group L.P. (NYSE:BX). The prevalent trend leans towards the purchase or development of funds-of-funds units with the primary motive of stretching past corporate leveraged buyouts.