Perhaps better known by its former name, Kohlberg Kravis Roberts, KKR has not been a “Barbarian at the Gate” for a while now, having eschewed the hostile takeover for the handshake years ago. But since the credit crisis began in 2008, the company has had trouble even making friendly deals amid a barren buyout climate. So instead of corporate takeovers, KKR is placing a bet on another horse it knows well: energy. The company on Tuesday announced it has raised some $4 billion from its affiliates and institutional investors to invest in natural resources and infrastructure, particularly oil and gas properties.
It has plenty of experience in the energy industry. Co-founders (and cousins) Henry Kravis and George Roberts grew up in Oklahoma and Texas, respectively, and have family in the sector. The company’s $7.2 billion takeover of Samson Investment Company, which owns stakes in some 15,000 oil and gas wells, was one of the largest private equity deals of 2011. And before the buyout market went sour along with the rest of the economy, KKR was in on the $45 billion acquisition of TXU (now Energy Future Holdings) in 2007, one of the largest private equity deals ever.
If KKR’s current energy and infrastructure funds don’t pan out, well, the company also has felt the pain of an energy deal gone wrong: It has since written off most of its investment in Energy Future.