(Bloomberg) -- KKR & Co. plans to launch its first-ever fund to invest in mid-size companies and may raise as much as $5 billion for the effort.
The fund, called Ascendant, will make investments in North America across sectors including financial services, health care, industrials, consumer, technology, media and telecommunications, according to people familiar with the matter. The plan is in the early stages, the people said.
KKR and its publicly-listed peers are expanding into new strategies as they seek to increase assets under management and bolster fee revenue. The firm has indicated that it will fundraise across at least 30 strategies this year, including various real estate products, a Europe private equity pool and a social good fund. It recently raised $17 billion for its biggest infrastructure fund ever and is wrapping up gathering money for its flagship buyout fund.
A KKR spokeswoman declined to comment.
The effort comes amid robust demand from yield-hungry investors piling into private equity to counter low interest rates. That’s driving buyout firms to market new funds faster than ever even as many investors have become over-allocated to the asset class.
Middle-market buyout funds raised a record $67 billion globally last year, according to Preqin data.
The new strategy will be part of the firm’s North American buyout business, which is run by Pete Stavros and Nate Taylor. It will be headed by Nancy Ford and Brandon Brahm, who are partners on the private equity team. Ford, who joined KKR in 2017, has been focused on consumer retail buyouts. Brahm, who has been with the firm for more than a decade, makes investments in the industrials sector.
The team for the fund will be comprised of some investment professionals from the flagship buyout fund and new hires, said one of the people.
KKR previously made middle-market investments through its flagship funds, including the purchase of C.H.I Overhead Doors, a manufacturer of garage doors, and PURE Insurance, a membership-only insurer for the wealthy.
©2022 Bloomberg L.P.