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KKR closes USD711m technology growth fund

KKR has held the final closing of KKR Next Generation Technology Growth Fund (NGT), a USD711 million fund dedicated to growth equity investment opportunities in the technology, media and telecommunications (TMT) space in North America, Europe and Israel.

The fund is focused on generating strong returns for investors by investing in high-growth companies.
Beyond access to financial capital, KKR offers partner companies access to KKR’s operational expertise, network, industry expertise, global reach and insights from its more than 100 current portfolio companies worldwide, which translates into over USD7 billion in IT spend and over USD10 billion in marketing spend annually.
NGT is part of KKR’s TMT private equity platform which is led by Herald Chen and Richard Sarnoff in the Americas and Philipp Freise in Europe. Leading the TMT growth strategy is KKR new-hire David Welsh, a veteran in the TMT growth equity space who joined the firm in October from Adam Street Partners, where he was a partner on the growth equity and venture capital teams focusing on enterprise technology.
“We believe we can offer a unique set of assets and resources to our partner companies,” says Welsh. “In today’s evolving technology landscape, the combination of KKR’s global network, sourcing engine, value creation and capital markets capabilities can help accelerate new market leaders. We look forward to leveraging our global footprint to build leading enterprises in technology, while also aiming to deliver strong returns for our investors.”
The fund seeks to invest in secular growth areas with structured downside protection, limited leverage and will seek to take on execution risk as opposed to fundamental technology risk. In particular, NGT is expected to make equity investments amounting to less than USD100 million and focused on the following themes: business to business software /software-as-a-service, information technology automation/ infrastructure, security, scalable internet /digital media, and the internet of things.
“Our overall approach to TMT is to identify platforms – management teams, businesses, and sectors –where we can invest to build leading global TMT enterprises, whether in private equity or now through our new growth fund,” says Chen. “This strategy has served us well and we look forward to building upon it further by helping more entrepreneurs take their companies to the next level.”
The fund received strong backing from a diverse group of new and existing global investors, including public and corporate pensions, family offices and high net worth individual investors.
“We are really pleased with the response from investors and excited to see they share our enthusiasm for the attractive opportunities NGT presents,” says Alisa Amarosa Wood, KKR member and head of private market products group.

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