The barons of the buyout industry may need to buy one another out next.
KKR, the private equity firm co-founded by Henry Kravis, reportedly sought to tuck lender and investment firm HIG Capital under its growing corporate credit wing. That would mean adding about $20 billion in assets to Kravis' company. Neither firm responded to a request for comment.
That's not all; HarbourVest Partners, perhaps looking to take advantage of the discounted pound in the U.K., submitted a bid to buy SVG Capital, a British firm, but was rebuffed late last week. SVG Capital told HarbourVest, which is based in Boston, that it felt the bidder's offer came up short — and revealed it has had talks with other "credible parties," as well.
For some, it's the right move, in order to beef up assets under management.
Public markets haven't been too friendly to private equity firms' initial public offerings, and as their senior leaders consider ways to exit long-held positions in their companies, options to net a return are dwindling. Tacking on other businesses could at least help juice management fees for buyers.
But for other private equity firms, it may be the only other option, beyond becoming zombie funds or winding down in the long run.
"The bloom has come off the rose for many big private equity firms," said Richard Farley, chair of the leveraged finance group at law firm Kramer Levin.