KKR & Co. will acquire Avoca Capital, a European credit investment manager with about $8 billion in assets under management, confirmed Kevin McMahon, Avoca spokesman, and Kristi Huller, KKR spokeswoman.
Terms of the transaction are not being disclosed. The deal is expected to close in the first quarter of 2014. On closing, KKR will have about $28 billion in credit assets in its multistrategy credit platform.
“The acquisition will allow the team to use the capital, brand and distribution power of KKR globally to take full advantage of the opportunities that will exist in European credit over the next decade,” Mr. McMahon wrote. “This is something we would find harder to do as an independent manager.”
In addition, the acquisition will allow Avoca to deal with European collateralized loan obligation retention requirements that 5% of any new securitization in Europe be held by the manager for the life of the deal. “This would be very difficult for us to do as an independent manager,” Mr. McMahon stated.
It would also give the team and Avoca investors access to global credit investment strategies and strategies across the capital structure, which is becoming increasingly important. Avoca concentrates currently on the European subinvestment-grade credit markets.
Alan Burke, Avoca co‐founder and CEO, will head KKR's European credit business with Nat Zilkha, co-head of KKR's special situations. Both will report to Craig Farr, head of KKR's global credit and capital markets business, KKR Asset Management.
Donal Daly, cofounder and chairman of Avoca, will be senior adviser to KKR when the transaction closes. All other Avoca employees in Dublin and London will join KKR.