I WANT TO START ON KKR’S EARNINGS LAST WEEK.
ONE OF YOUR CO-C.E.O.S SAIDS IT IS IMPORTANT TO EXPAND BEYOND
THE U.S. AND SPECIFICALLY MENTIONED
EUROPE. WHAT DOES IT LOOK LIKE?
>> GREAT TO SEE YOU. IT IS REASSURING THAT WE CAN
ALL BE HERE IN PERSON. DEEMED THAT TWO YEARS AGO, IT
WAS -- END OF THE PREPANDEMIC PERIOD. NOW WE’RE REOPENING WITH
THOUSANDS OF PEOPLE HERE AND GOOD TO SEE YOU HEALTHY AND IN
GOOD FORM.
>> LIKEWISE.
>> IT HAS NEVER BEEN MORE INTERESTING THAN TO INVEST IN
EUROPE AT THIS TIME. THIS PANDEMIC HAS SHOWN THAT
THE -- THAT WE SEE IN WORLD, I.E. TECH, THE FACT THAT ASIAN
SOCIETIES PUT A HUGE WEIGHT ON HEALTHCARE SYSTEMS AND
SUSTAINABILITY. REALLY PEOPLE THINKING ABOUT
HOW THE WORLD IS CHANGING AROUND CLIMATE CHANGE, ETC.,
BEING ACCELERATED AND EUROPE IS BEHIND THE U.S. OR ASIA. K.K.R.
HAS A REAL TRACK RECORD IN PARTNERING WITH FAMILIES AND
ENTREPRENEURS OF COMPANIES TO HELP THEM LEAPFROG INTO THAT
DIRECTION.
>> WHAT ARE THE SECTORS? WHAT ARE SOME OF THE SPECIFICS
WHERE YOU’RE FINDING THE GAPS AND THE OPPORTUNITIES?
>> THE S&P 500 IS APPROACHING 40%.
EUROPE, THE SAME NUMBER IS IN THE SINGLE DIGIT PERCENT.
ALL OF THESE EUROPEAN COMPANIES ARE GRAPPLING WITH TECH FRANS
FORMATION. THAT IS A MASSIVE CHALLENGE FOR
EVERYONE. WE HAVE DONE MORE THAN 150 TECH
DEALS LOCALLY. ONE OF ITS KIND HERE IN EUROPE.
WHAT THEY ARE LOOKING FOR IS -- MORE IMPORTANTLY THE ABILITY TO
TALK ABOUT WHAT’S HAPPENING IN SILICON VALLEY AND WHAT’S
HAPPENING IN ASIA.
>> TECH IS NOT CHEAP THOUGH.
>> IT IS NOT CHEAP. WHAT WE ARE DOING DIFFERENTLY
FROM OTHERS IS THE PARTNERSHIP ABLE TO GET INTO THE
TRANSACTIONS A LITTLE BIT BETTER.
ALL PARTNERS ARE NOT LOOKING TO OPTIMIZE THE -- THEY ARE
LOOKING TO OPTIMIZE THE VALUE EQUATION OVER TIME AND THE
OVERALL EQUATION FOR THE ENTRY AND EXIT.
>> ALONG WITH ALL OF EUROPE, YOU REALLY HAVE LED PART OF
EFFORT TO BUILD OUT 401 (K) R’S PRESENCE IN GERMANY.
WE FIND OURSELVES IN GERMANY WITH A NEW LEADERSHIP.
THE TRAFFIC LIGHT COALITION. WITH AR MORE LEFT LEANING
GOVERNMENT COMING INTO POWER HOW DO YOU VIEW THE BUSINESS
ENVIRONMENT IN GERMANY?
>> IT IS CHANGE IS COMING TO GERMANY.
YOU THINK ABOUT THE COALITION. THE COMBINATION OVER THE
FISCALLY CONSERVATIVE LIBERAL DEMOCRATS, AND THEN THE REFORM
ORIENTED GREEN PARTY IS A VERY GERMAN PHENOMENON AND TO MAKE
THAT WORK ALL THREE TOGETHER. PEOPLE ARE EMBRACING ALL OF THE
TRENDS WE TALKED ABOUT. TECHNOLOGY IS A LIBERAL DOMAIN
OF CLIMATE CHANGE. THE FABRIC TO MAKE IT ALL WORK
FOR ALL IS SOMETHING THAT THE SOTEMPERATURES ARE -- SO AT
K.K.R., WE SEE THAT POSITIVELY.
>> IS INFLATION A PROBLEM? CHRISTINE LAGARDE SAYS THAT IS
A PROBLEM TEMPORARILY. DO YOU AGREE OR IS THIS AN
ISSUE FOR EUROPE?
>> MAKER ECONOMICALLY THE BANKS HAVE TRIPLED THEIR BALANCE
SHEETS. WE HAVE TO DISCERN BETWEEN
SHORT-TERM SUPPLY CHAIN DISRUPTIONS AND OTHER TREND
THAT COME FROM THAT. LONG-TERM HOW DO YOU WE GET OUT
OF THAT WITHOUT FACING LONG-TERM INFLATION.
WE HAVE INVESTORS DOING THE BEST WE CAN DO ON THE MICRO
LEVEL. MANY OF THESE TECH COMPANIES
THAT WE INVEST IN HAVE THAT PRICING POWER.
>> LET’S GET INTO THE SUSTAINABILITY QUESTION. K.K.R.
HAS DOUBLED OR PLANS TO DOUBLE THEIR INVESTING TEAM.
WHAT DOES THAT LOOK FOR YOU AS INVESTING BECOMES MORE
IMPORTANT FOR YOUR INVESTORS?
>> QUARTERLY ANNOUNCEMENTES THEY MAKE WHERE E.S.
DISBRVETION ONE OF THE KEY PLANTS.
HERE IN EUROPE, ONE OF THE AREAS WHERE EUROPE IS AHEAD OF
THE WORLD IN TERMS OF ASIA AND THE U.S.
THAT MEANS OUR MORE YOU KNOW FORWARD LEANING PRIVATE EQUITY
FUNDS WILL BE COMPLIANT WHICH MEANS WE NOT ONLY -- ACROSS THE
FIRM AND EVERYTHING WE DO, EVERY INVESTMENT, THE CRITERIA,
WE MEASURE IT QUARTERLY. WE PUBLIC.
>> I IT ANNUALLY. WHAT CAN THE INVESTMENTS THAT
CAN PRESENT -- SEEN AS AN IMPROVEMENT.
>> UNFORTUNATELY WE HAVE LESS THAN A MINUTE LET.
QUICKLY BEFORE I LET YOU GO, PRIVATE EQUITY HAS DONE VERY
WELL. DID WELL THROUGH THE PANDEMIC.
WHAT ARE YOU WORRYING ABOUT? WHAT CAN DERAIL THE RE RALLY?
>> IN APRIL 2020, WE WERE INVESTING THREE TIMES MORE THAN
WE USUALLY WERE DURING THAT CRISIS.
IT IF HE WANT SCARY BUT IN THE END WE WERE RIGHT BECAUSE OF
THE FOCUS ON THE THEME WE TALKED ABOUT.
COMING OUT OF THE CRISIS, MY CONCERN IS THAT OVERALL, PEOPLE
POTENTIALLY PUT TOO MUCH LEVERAGE IN THE SYSTEM BUT AS
LONG AS YOU STICK TO THOSE TRENDS AND CREATE FUNDAMENTAL
CHANGES TO YOUR INVESTMENT YOU WILL BE COMING OUT VERY WELL ON
THE OTHER SIDE.
THAT IS WHAT DIFFERENTIATE K.K.R.
WITH THAT WE GO OPTIMISTICALLY INTO THE FUTURE.
>> SO GREAT TO CATCH UP WITH YOU TODAY.
WONDERFUL TO BE IN PERSON HERE. F.FRANCINE: