KKR Said to Have Held Takeover Talks With Peer HIG Capitalby and
Deal would have added $20 billion in assets under management
HIG instead sold minority stake to Dyal Capital in August
KKR & Co., the private equity firm founded by Henry Kravis and George Roberts, held talks with HIG Capital this year about a takeover of the mid-market specialist, said people familiar with the matter.
The New York-based firm held preliminary talks with HIG owners Sami Mnaymneh and Tony Tamer in the second quarter about a potential deal, said the people, who asked not to be identified because they weren’t authorized to speak publicly. HIG canceled the talks, which didn’t result in an offer, and instead chose to sell a minority stake to Dyal Capital Partners in August, the people said.
A spokeswoman for Miami-based HIG said in an e-mailed statement that the firm had never engaged in conversations with any party about a sale and had never entertained the idea of one. A spokeswoman for KKR declined to comment. Mnaymneh and Tamer didn’t immediately respond to e-mails seeking comment.
A takeover of HIG would have added more than $20 billion to KKR’s $131 billion in assets, a larger than usual strategic move. The group, which was founded in 1976 and manages a variety of alternative-asset strategies, has focused on growing its main business line, private equity, organically.
New-York based Dyal bought a non-voting stake of less than 15 percent of the economic interest of HIG for an undisclosed figure, according to a statement at the time. HIG’s owners are using the Dyal investment primarily to fund growth initiatives, which could make the firm more attractive to an outright buyer in future, the people said. They have not abandoned the idea of an eventual sale, the people said.
Sales of private equity firms are rare, with founders typically shuttering their shops or handing them to the next generation as they approach retirement. Blackstone Group LP and Ares Management LP, however, have opportunistically added new businesses in recent years, buying Credit Suisse Group AG’s Strategic Partners, a secondary platform for investing in other funds, and American Capital Ltd., respectively.
HIG, founded in 1993, has offices in the U.S., Europe and South America. The mid-market focused firm operates a range of funds across equity, debt and real estate strategies, according to its website.