Powerful U.S. private markets company KKR has opened an office in Zurich, according to finews.ch research. In this country, the private market specialist is interested in the very wealthy clientele of the private banks, above all.
KKR Kohlberg Kravis Roberts had already founded a sales company in Zurich as early as last September. finews.ch learned that the office in the city is now also just about to start operations officially.
This means that the American private market giant has now physically arrived at the local financial center. KKR has been working the Swiss market for years, but from other locations in Europe, such as Frankfurt and London. The team in Zurich includes Hagen Raab (formerly of Schroders and Oddo) and Tomislav Culic (formerly of HSBC and EIM).
The Competition is Already Here
By all accounts, a small team on site will initially make contact with the clients. Here, the U.S. financial investor is not merely interested in institutional investors; it also wishes to broker its range of funds to the very wealthy clientele of local (private) banks and independent asset management (EAM).
That strategy – for which KKR’s division Global Wealth Solutions is responsible – is not completely new; it has already been applied here by even bigger U.S. competitor Blackstone, as finews.com also reported. Since 2021, Blackstone has also been operating in this way with a small team based in Zurich, and is building a network of private bank and asset management contacts for the firm’s own private wealth segment.
Even Fintech is Getting Involved
The U.S. giants seem to be pushing at an open door: there is hardly a single local private bank which would not want to intensify the high-margin private market investments with its rich clientele. The biggest players form exclusive partnerships. One example is the market leader UBS with Zug-based investment management company Partners Group.
For their part, new fintech platforms such as the American iCapital or Berlin’s Moonfare (in german only) are trying to widen their access to popular private market investments and lower the entry threshold for asset investment. Owing to regulatory obstacles, however, this «democratization» of alternative investments has not yet reached the affluent and retail segment.
Size Matters
The interest rate reversal means that the predominantly illiquid investments have become less attractive in recent times, particularly when compared to low-risk investments such as bonds. It has also become more expensive for financial investors to acquire a stake in businesses. In this environment, however, giants such as KKR can count on ample scales and an established reputation.
With a total volume of assets under management of around $519 billion at the end of last June, the KKR funds are investing in a broad range of private equity, real values, and loans. The company, founded in 1976, now operates from 24 offices on four continents. In 2021 the company founders, Henry Kravis and George Roberts, stepped back from running operations; this role was passed to the duo Joe Bae and Scott Nuttall.
