Global private investment major KKR is drawing up a pipeline of potential acquisitions as market turbulence creates new investment opportunities, according to a report by Bloomberg citing comments from Co-Chief Executive Scott Nuttall.
Speaking at the Bloomberg Invest conference in New York, Nuttall said the private markets giant is preparing to deploy capital but is not yet ready to act.
“It’s all about being ready,” Nuttall said during a live recording of Bloomberg Deals. “You’ve got to create your shopping lists. That’s what we’re focused on.”
Recent market volatility — driven by credit concerns, geopolitical tensions and trade uncertainty — has unsettled investors, many of whom remain wary of another major downturn following the global financial crisis.
However, Nuttall said KKR does not currently see the conditions for a major market collapse. Instead, the firm continues to focus on long-term investments with time horizons of 10 to 15 years.
“We’re very calm. I think we’re actually enjoying this period,” he said.
Nuttall also suggested the alternative asset management industry could face a period of consolidation as market pressures intensify. Some firms may struggle, while stronger players could emerge from the cycle with greater scale.
“We’re headed toward a K-shaped industry, where you’re going to see a bunch of winners and some folks that have more lessons that they have to learn as they come out of this period,” he said.
He added that the sector could see more acquisitions similar to BlackRock’s expansion into alternatives, with larger asset managers buying specialist firms to broaden their investment capabilities. Smaller managers may also combine to create more diversified platforms.
KKR has already been pursuing that strategy. Earlier this year, the firm agreed to acquire sports and secondaries investor Arctos Partners, a deal Nuttall said made sense both culturally and strategically by giving KKR exposure to asset classes where it previously had limited presence.
