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KKR promotes Stavros and Taylor; Monroe buys a VC lender; Oaktree’s Hobbs discusses DEI

Good morning, Hubsters. MK Flynn here with the Wire on a busy Thursday.

We’ve got a lot of PE news to report this morning, including Monroe Capital’s acquisition of venture capital lender Horizon.

If you’ve got a sweet tooth, you’ll enjoy hearing about a deal out this morning from Levine Leichtman Capital Partners.

And we’ve got a Q&A with Oaktree’s Milwood Hobbs, Jr, in our Black History Month series.

But first up, a pair of people moves at KKR.

It’s a small world after all. Pete Stavros and Nate Taylor have been named global co-heads of KKR’s private equity business. Since 2019, they have served as co-heads of PE in the Americas.

In their new roles, Stavros and Taylor will “work closely with regional PE leadership and teams around the world to support alignment on global investment themes, share best practices and operational playbooks and facilitate greater mobility of talent,” said the firm’s announcement.

Stavros and Taylor both joined KKR in 2005. Stavros has been a big champion of employee ownership.

Monroe Capital, the Chicago-based boutique asset management firm specializing in private credit markets, is acquiring Horizon Technology Finance Management, the investment advisor to Horizon Technology Finance Corp.  

As a venture capital lender, Horizon has deployed over $3 billion in loan commitments across more than 300-plus VC-backed companies since its founding in 2004.

Chocolate lovers. Levine Leichtman Capital Partners, based in Los Angeles, has acquired Kilwin’s Quality Confections and Kilwins Chocolates Franchise, which specialize in chocolate, ice cream and confectionary products. The acquisition marks the third platform investment of LLCP Lower Middle Market Fund III LP.

Baker’s dozen. There have been a slew of food deals announced already in 2023.

Obey Martin Manayiti rounded up half a dozen snack-related transactions in January, and Irien Joseph found another half a dozen in February.

Black History Month. PE Hub is featuring interviews with private equity professionals who are Black. Today, we hear from Milwood Hobbs, Jr, managing director and head of North American sourcing and origination at Oaktree Capital Management.

Hobbs leads Oaktree’s North American sourcing and origination group, which focuses on private credit sourcing and deal origination for the firm’s US private debt, global private debt, special situations and global opportunities strategies. He also serves on the investment committee for Oaktree’s direct lending platform. Prior to joining the firm in 2013, Hobbs was an executive director at Natixis Securities, focused on building the high-yield sales and trading franchise. Earlier in his career, he spent five years at Goldman Sachs as a vice president in leveraged finance origination and sales.

Here are some excerpts from the interview:

Over the last couple of years, PE firms have talked a lot about making the industry more inclusive for people who are Black and/or members of other underrepresented groups. In your view, how are PE firms doing when it comes to diversity, equity and inclusion?

I think PE firms have been very proactive acknowledging the gap in diverse talent.  Moreover, it actually requires patience and a real focus to create a pipeline of people.  Programs like Girls Who Invest, SEO and Alt Finance have been on the forefront of developing diverse talent in the Alternative and PE space. Oaktree has been very involved in these programs with really positive results to support the investment in diverse talent.

It’s Black History Month, and PE Hub is showcasing Black leaders in private equity. Please tell us about someone you admire.

Reginald Lewis is someone I admire for his accomplishments in the PE space.  He was ahead of his time in terms of aptitude, execution and passion.

Note: In 1987, Lewis bought Beatrice Foods for $985 million in the largest leveraged buyout of overseas assets by an American company at the time. By 1992, TLC Beatrice International had annual sales of over $1.8 billion, making it the first Black-owned business to generate a billion dollars in annual sales. Lewis died at the age of 50 after a short illness in 1993. For more info, see the Reginald F. Lewis Foundation website.

That’s a wrap for today. Tomorrow, Obey will write the newsletter to finish up the week, On Monday, PE Hub Europe editor Craig McGlashan will be filling in for me as I take a couple days for R&R.

Happy dealmaking,

MK

Read the full wire commentary on PE Hub ...

Also of note (may require subscriptions)

Wall Street backs new class of psychedelic drugs. Psychedelic-therapy industry gets a reality trip as investors focus on treatments costing less time and money. (Wall Street Journal)

Maryland State Retirement and Pension System, facing a steep overallocation to private equity, is ramping back on its pace as it seeks to rebalance its portfolio in the market dislocation. (Buyouts)

Apollo Global Management is set to launch its first formal private equity secondaries fund next quarter, co-president Jim Zelter announced on the firm's fourth quarter and full-year earnings call this month. (Secondaries Investor)

Difficult industry-wide fundraising dynamics will persist this year – that’s the main takeaway from the fourth quarter and full-year 2022 earnings season in February.. (Private Equity International)

Amid a flurry of deals starting to hit the market this year, a few LP portfolio sales from last year found their way to closure despite challenges in pricing. Lockheed Martin Investment Management closed a sale of a portfolio of LP fund stakes around year end, sources told Buyouts. The company sold in the range of $600 million to $700 million worth of its private equity holdings, the sources said.
(Buyouts)