KKR is expected to launch next flagship fund later this year: adviser

Another big one could be hitting the market later this year.

KKR is expected to launch its 14th flagship fund in the latter part of 2023, according to a presentation from consultant Callan to the Chicago Teachers’ Pension Fund investment committee Tuesday. Buyouts watched a webcast of the meeting.

The fundraising would be a quick turnaround. KKR closed its 13th flagship on $19 billion in April 2022.

“KKR is likely coming back later in the year with Fund XIV,” said Gary Robertson, a senior vice president in Callan’s private equity group. Robertson’s remarks came as part of a presentation detailing the system’s private equity pacing plan.

Robertson said Chicago Teachers plans to commit up to $10 million to the possible new KKR fund. Chicago Teachers has committed $25 million to previous KKR funds, he said.

Spokespeople for KKR and Callan declined to comment about a possible new fund. No further details about KKR’s potential new flagship fund were discussed at the meeting.

In a November earnings call, KKR co-CEO Scott Nuttall said the firm was seeking new sources of capital as traditional LPs like pensions are dealing with overexposure issues.

Chicago Teachers is one such LP.

According to Callan’s presentation, the $11.7 billion system has a 5 percent target to private equity, which equated to $568 million as of June 2022, according to Callan. As of February, the actual allocation was more than 8 percent, or $946 million.

To rectify this, the investment committee approved a plan to commit $50 million annually to private equity in the years ahead. According to Callan, the system scheduled $70 million in annual commitments to private equity in previous years.

Chicago Teachers has uncalled commitments of $596 million in its private equity portfolio, according to the presentation.