Buyout Titan Pushes Further Into The Energy Business With Stake In Hedge Fund

Tom Burroughes

14 July 2014

KKR & Co, the private equity powerhouse has bought almost a quarter of BlackGold Capital Management, which is a credit-orientated hedge fund specializing in energy and asset assets.

Financial terms of the transaction were not disclosed by KKR in its statement.

BlackGold was set up in 2006 by co-founders Erik Dybesland and Adam Flikerski, who have spent their entire careers in the energy sector,

The hedge fund firm’s management team will stay in place to run it independently, and BlackGold's investment strategies will not change as a result of KKR's investment, KKR said. All of BlackGold founders' capital will remain invested in the funds and the majority of the proceeds received from this transaction will be re-invested in the funds. On a pro forma basis under this transaction, the BlackGold management team will own 75.1 per cent of BlackGold.

KKR said the move is part of its drive to build its hedge fund platform, which is co-led by Girish Reddy and Todd Builione, and to expand its energy business, which is led by Marc Lipschultz. KKR's hedge fund platform includes its approximately $10 billion multi-manager hedge fund business and a Strategic Stakes & Seeding business that invests the firm's balance sheet to acquire minority stakes in hedge fund managers. The BlackGold move is KKR's second minority stake in a hedge fund manager, following the 2013 investment in Nephila Capital, an insurance-linked securities manager with approximately $10 billion under management.

The investment by KKR was made by the firm and not through KKR's investment funds, it added.