KKR and Pacific Alternative Asset Management Company (PAAMCO) are teaming up to create a new liquid alternatives investment firm by combining PAAMCO and KKR Prisma.
Under the terms of the agreement, the entire businesses of both PAAMCO and KKR Prisma will be contributed to a newly formed company that will operate independently from KKR, and KKR will retain a 39.9 per cent stake as a long-term strategic partner.
This transaction will create one of the largest firms in the liquid alternatives industry, with over USD30 billion of assets under management or advisement and the ability to fulfil a broad range of liquid alternatives needs.
Founded in March 2000, PAAMCO is a private institutional investment firm with USD24 billion of assets under management or advisement dedicated to offering alternative investment solutions.
KKR Prisma, with approximately USD10 billion of assets under management, constructs and manages customised hedge fund portfolios and other products across the spectrum of liquid alternatives investments.
The combined business will operate under the brand PAAMCO Prisma Holdings, with PAAMCO and KKR Prisma’s core investment and client teams remaining unchanged.
The Prisma and PAAMCO brands and funds will continue to exist side-by-side in their current separate form.
Jane Buchan, co-founder and CEO of PAAMCO, says: “As the alternatives industry continues to evolve, expanding our reach will further enhance our ability to innovate and to provide leading solutions to our clients. This transformative step will enable us to provide added scale benefits, wider investment options and faster innovation to all of our investors. Organisationally, we are excited by how well Prisma’s investment franchise complements our own, and by the possibilities that KKR brings. I look forward to working with Girish to capitalise on the experience and expertise of our combined teams to continue to deliver compelling and value-added solutions to our clients.”
Girish Reddy (pictured), co-founder of KKR Prisma and head of KKR Hedge Funds, adds: “Joining forces with PAAMCO will enable us to better serve our clients’ evolving investment requirements. I believe greater scale, flexibility, and additional resources will enhance our ability to generate strong investment performance and to build and service bespoke solutions for our clients. Additionally, we look forward to continuing our strong partnership with KKR.”
Henry Kravis and George Roberts, co-founders and co-chairmen of KKR, say: “We are bringing together two leading names to create an even stronger liquid alternatives firm. The decision to combine KKR Prisma with PAAMCO is based on our shared view that a larger enterprise with exceptional resources, technology and investment acumen will be even better positioned to support clients in today’s marketplace.”
