Stone Point Capital and KKR have established a new company, KKR – SPC Merchant Advisors, to provide principal and agency-based capital markets services to mid-market and sponsor-backed companies as well as make certain principal investments to support client needs. “The financial services industry is going through unprecedented change that is creating challenges for companies to conduct business. We see an opportunity for an independent capital markets business that is willing to take on principal risk and allow its clients to pursue their growth and business development initiatives,” said Chuck Davis, Co-founder of Stone Point.
Trident V and KKR will each commit $150 million of equity, or $300 million in total, to Merchant Advisors to support its capital markets activities and client base. Merchant Advisors will be overseen by a board of directors consisting of equal representation from KKR and Stone Point. The day-to-day origination, execution and underwriting activities of the company will initially be managed by KKR Capital Markets executives. Over time, Merchant Advisors may expand its business to include other services such as risk management and fundraising services. This new business will be distinct and separate from KKR’s existing capital markets business which primarily serves KKR’s private equity portfolio companies.
“Stone Point is a leading investor in the financial services sector with a strong track record of backing new and innovative platforms, and KKR is excited to partner with the team. Together with Stone Point, we believe Merchant Advisors will be well positioned to deliver a critical capital markets service to underserved corporate and sponsor clients, particularly as the structure of the financial industry is getting reshaped,” said Craig Farr, Member of KKR and Global Head of Capital Markets.
“We have known and respected Steve Friedman and Chuck Davis from Stone Point for many years and are excited to work with them in this new partnership. Middle market companies and financial sponsors need access to more services and capital and we believe KKR – SPC Merchant Advisors will be well positioned to provide both,” said Henry Kravis and George Roberts, Co-Chairmen and Co-CEOs of KKR, in a statement.
Stone Point Capital targets investments in the insurance and financial services industries including, insurance underwriting, distribution and services, benefits and healthcare, asset management and retirement savings, and banking and depository institutions. The firm is located in Greenwich, CT (www.stonepoint.com).
KKR makes private equity, fixed income and other investments in companies in North America, Europe, Asia and the Middle East. The firm has $62 billion in assets under management. In addition to its New York headquarters the firm has offices in Menlo Park, San Francisco, Houston, Washington DC, London, Paris, Hong Kong, Tokyo, Beijing, Mumbai, Dubai and Sydney (www.kkr.com).