KKR Shifts Strategy to Attract Wealthy Individual Investors

KKR & Co. Inc., a leading global investment firm, has renegotiated terms with its institutional investors to allow its evergreen private equity funds—targeting wealthy individuals—a larger share in deals. Historically, KKR's institutional backers, such as pension funds and university endowments, were the primary capital sources, with traditional closed-end funds receiving 92.5% of equity in deals. KKR-affiliated vehicles, including those for employee capital, were limited to 7.5%. However, the 2023 launch of the "K-Series" evergreen funds introduced new dynamics, as these funds, which permit regular capital inflows and withdrawals, attracted significant capital—almost $12 billion as of July.

To accommodate this influx, KKR sought to raise the 7.5% limit to as much as 20% for its evergreen vehicles, notably renegotiating terms with backers of its European Fund VI and seeking similar changes in other funds.

This strategic shift reflects a broader trend in private equity, where the growing influence of wealthy individual investors is reshaping investment strategies. The K-Series funds, launched in 2023, are open-ended, semi-liquid funds designed to attract individual investors. These funds offer regular capital inflows and withdrawals, distinguishing them from traditional closed-end private equity funds that typically have fixed investment periods and limited liquidity. By April 2025, the K-Series had more than doubled its assets to $22 billion, up from $9 billion a year earlier.

The renegotiation primarily affects KKR's European Fund VI, with plans to implement similar changes across other funds. The adjustment allows KKR's evergreen funds to increase their participation in deals from 7.5% to up to 20%. This change is driven by the substantial capital inflows into the K-Series funds, which have amassed nearly $12 billion as of July 2025.

This development aligns with a broader industry trend of increasing individual investor participation in private equity. Historically, private equity investments were predominantly accessible to institutional investors. However, firms like KKR are now targeting the private wealth market, which consulting firm Bain estimates to be around $150 trillion, with alternative investments accounting for just 5%. KKR aims to increase the proportion of its capital from individual investors to between 30% and 50% over the next five years, up from the current 10% to 20%.

In August 2025, U.S. President Donald Trump signed an executive order allowing 401(k) retirement plans—worth approximately $9 trillion and held by 90 million Americans—to include alternative investments such as private equity, real estate, and cryptocurrencies. This policy change is expected to channel significant retail investment into alternative assets, further integrating individual investors into the private equity landscape.

The increased allocation to evergreen funds has raised concerns among institutional investors about potential dilution of their equity stakes and the possibility of less favorable deal terms. Institutional investors have traditionally been the primary capital sources for private equity deals, and this shift may impact their influence and returns.

To further expand its reach into the individual investor market, KKR has partnered with Capital Group to develop a series of public-private investment solutions. In October 2024, the firms filed registration statements with the SEC for two public-private fixed income interval funds, Capital Group KKR Core Plus+ and Capital Group KKR Multi-Sector+, expected to launch in the U.S. in the first half of 2025, pending regulatory approval.

This development is part of KKR's ongoing efforts to diversify its investor base and adapt to changing market dynamics. The firm's history includes notable transactions such as the 1989 leveraged buyout of RJR Nabisco and the 2007 buyout of TXU Energy, both of which were the largest buyouts at their respective times. The current shift towards individual investors represents a significant evolution in KKR's investment strategy.

KKR's strategic shift to accommodate individual investors marks a significant evolution in the private equity landscape. While this move opens new avenues for capital inflow and diversification, it also presents challenges in balancing the interests of institutional and individual investors. As the industry continues to adapt, stakeholders must navigate the complexities of this new investment paradigm.