KKR & Co. Inc. latest fundraising may indicate recovery for megafunds, but suggests that smaller firms may be struggling.
The final close of the KKR North America Fund XIV, or NAX4, was US$23 billion, surpassing both the initial target of some $20 billion and its hard cap of $22 billion.
KKR says it’s the largest private equity fund that focuses solely on investing in North America. Investors included the Louisiana State Employees Retirement System, the Washington State Investment Board and New York State Common Retirement Fund, as well as sovereign wealth funds, insurers, endowments and foundations.
But the fundraising comes amid a difficult backdrop for private equity.
According to a PitchBook report. total fundraising in the first quarter of the year was $86 billion, the weakest year of private equity inflows since 2018.
Another figure which might give some concern is that, according to KKR, its private equity assets under management have doubled to about $229 billion since Covid-19. That jump happened in some of the most volatile macroeconomic and geopolitical conditions seen in decades.
Have KKR’s capabilities and ability to deliver value also doubled over the same period? Have North American markets, or markets worldwide, doubled their capacity to return value since 2020? Obviously, a substantial number of limited partners are hoping that they have.
KKR says it delivered a gross internal rate of return of 23%, or 19% net, across its three prior North American funds, and gross multiple on invested capital of 2.1 times, or 1.8 times net, at the end of 2025. Presumably, LPs in the new fund will be expecting similar returns.
PitchBook data is quite supportive, showing about $481.6 billion invested worldwide and $306.7 billion in exit value in the first quarter of 2026, after more than $1.4 trillion in exits in 2025. But it also notes that the industry overall has about $2 trillion in dry powder to invest.
To be fair, if any entity in the industry has the connections, experience and leverage to deliver in line with past performance, it’s probably KKR, especially on its North American home ground.
The firm is the classic barbarian at the gate, renowned for bidding up the RJR Nabisco deal to $25 billion back in 1988. Whether it’s going to bid up the entire private equity industry, or part of it, to unheard of levels remains to be seen.
