KKR Increasing Reach Into Hedge Fund Market

July 15, 2014 Debbie Jacobs Hedge Fund News

BlackGold Management Invests in the Energy  and Natural Resources Sector

BlackGold Management Invests in the Energy and Natural Resources Sector

After about one year of negotiations Kohlberg Kravis Roberts purchased close to 25 percent of the Houston-based hedge fund BlackGold Capital Management LP. The deal is part of KKR & Co’s strategy to solidify their hedge fund bets.

BlackGold is a $1.4 billion credit firm, investing in natural resources and energy.
George Roberts, who is a co-founder of KKR and is from Houston, had heard about BlackGold and brought it into the discussion at KKR. The deal will allow KKR to share in the management of BlackGold and to be a partner in the incentive fees that BlackGold collects.

Erik Dybesland and Adam Flikerski, co-founders of BlackGold, explain that they will reinvest most of the money they will receive for the buy-in from KKR back into their funds. They say that they will continue to operate independently as well.

Entering the hedge fund sector is a way for KKR to diversify its investment portfolio, which is generally more dependent on corporate buyouts and related deals. But such deals have become a smaller part of KKR’s revenue. Analysts expect that the hedge fund industry will continue to grow as pension funds increase their stakes in alternative investments.

The investment in BlackGold is KKR’s second venture into the hedge fund space. Last year KKR also purchased a 24.9 percent stake in the Bermuda-based Nephila Capital Ltd.

Adam Flikerski, BlackGold, Erik Dybesland, George Roberts, KKR,

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