Former CIA director and U.S. General David Petraeus has found a new purpose for his military skills. Recruiting family office money.
KKR & Co. is competing heavily with other private equity firms including Blackstone Group and Carlyle Group for family office money, an almost $4 trillion market, Bloomberg reports. As the firms desperately court the growing wealth of Silicon Valley and other entrepreneurs, they’re rolling out the big guns. Petraeus, chairman of the KKR Global Institute, is putting a celebrity shine on the KKR meetings with potential clients.
Matthew McCarthy was flown to New York from Ohio, where he manages money for the founders of a consumer-products company, to dine with KKR co-founder and billionaire Henry Kravis, as well as meet with Petraeus. Writes Bloomberg:
“They didn’t really pitch products,” said McCarthy, 43, whose firm Rockside Capital Partners intentionally stays under the radar. “They brought out General Petraeus.”
The more than 4,000 family offices around the world aren’t easy to crack. “You really have to go door to door,” said Jim Burns, KKR’s head of individual investor business. “Most family offices don’t necessarily want to be found.”
Making direct efforts to develop relationships with family offices seems to be working. Blackstone has more than tripled its private wealth money in the last five years, which now makes up $43 billion of its $310 billion total under management. Private wealth is growing in the private equity space, but remains under-tapped, says Blackstone. Last year Blackstone hosted an event at the Waldorf Astoria hotel to wine and dine advisors such as William Heitin, who manages more than $2 billion for families including the founders of Reebok and Stacy’s Pita Chip Co. Heitin’s firm met with more than 400 investment managers last year, and made only five investments.
Correction: An earlier version of this story misspelled the name of the former CIA director and U.S. General working for KKR. His name is David Petraeus, not Patraeus.
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