KKR Struggles to Lure Money to a New Fund

KKR co-founders Henry Kravis and George Roberts are having a hard time raising enough money to meet an $8 billion target for their biggest buyout fund in six years. Since they started selling it more than 18 months ago, the North American XI Fund has gathered $6.2 billion, according to KKR’s earnings report for the third quarter, released on Oct. 26. The average time private equity firms need to raise money for a fund these days is 13 months, according to research firm Preqin.

The poor performance of KKR’s 2006 fund has hurt the company’s ability to attract money as fast as it had anticipated, according to a person with knowledge of the matter, who asked not to be named because talks with investors are private. The $17.6 billion fund has an average annual return of 5.4 percent, which trails the industry median of 7.6 percent, according to Preqin. Kristi Huller, a KKR spokeswoman, declined to comment.