Global wealth grew to an all-time high of $250 trillion in 2020, according to a Boston Consulting Group report. And that growth is causing many alternative investments managers, which traditionally focused on institutional investors, to recognize the opportunity to sell their products to the private wealth market.
Private equity firm KKR is certainly part of that trend, with the firm announcing Wednesday that it has appointed Todd Builione, president of KKR Credit and Markets, as its global head of private wealth. The newly created role is part of KKR’s efforts to expand access to its alternative strategies for individual investors, and Builione will oversee the teams responsible for building out its private wealth distribution platform.
“The combination of a low yield environment, new technology and innovative investment structures is creating an inflection point in the industry and we see individual investors poised to significantly increase their allocations to alternatives in the coming years,” said Eric Mogelof, global head of KKR’s client and partner group, in a statement.
KKR is not new to the retail business; the firm has $50 billion in private wealth assets, and the firm said it has a “large network of financial advisors and RIAs.” Private wealth now accounts for 10%–20% of new capital raised annually by KKR, and the firm expects that to increase to 30%–50% of annual fundraising over the next several years.
The growth efforts include investments KKR is making in sales and marketing, distribution, technology, and product creation and education.
“Today, KKR’s private equity, credit and real estate investment strategies are accessible for individual investors through a suite of KKR-sponsored and third-party continuously offered registered funds,” the firm said in a statement.
Several alternative investment asset managers, which traditionally catered to the institutional investors, have made more dedicated efforts to expand into the retail market, including Blackstone, Hamilton Lane and Apollo, which last year created a business unit focused on retail investors.
In December, Apollo announced its acquisition of Griffin Capital, a privately held alternative investment asset manager in Los Angeles. The move adds 60 retail-facing distribution professionals and hundreds of distribution agreements. Apollo recently set a target at its investor day of raising $50 billion-plus of organic capital for its global wealth business over the next five years.
Early last year, Hamilton Lane launched a '40 Act fund to bring its private equity and private credit strategies to qualified U.S. clients with a minimum $50,000 investment. Shortly afterward, the firm announced its acquisition of Denver-based long/short equity fund manager 361 Capital.