KKR's Alisa Wood - innovating in private markets

Welcome back to the Alt Goes Mainstream podcast.

Today’s episode dives into the details of product innovation in private markets with a private equity veteran who has helped to pioneer a new investment structure and working with the wealth channel.

We sat down at KKR’s Hudson Yards office with Alisa Wood, a Partner and Co-CEO of KKR Private Equity Conglomerate LLC (K-PEC).

Alisa has been at KKR for over 20 years. She joined the firm in 2003 and is a Partner. She co-leads the firm’s innovative private equity open-ended, perpetual vehicles serving as the Co-CEO of KKR Private Equity Conglomerate LLC and as a member of the investment committee for the KKR Private Markets Equity Fund.

She was previously the Global Head of the Private Markets and Real Assets Strategies Group and looked after private equity, infrastructure, energy real assets, real estate, impact, growth equity, and customized products.

She sits on a number of the firm’s management and leadership committees, including the Risk & Operating Committee, the Democratized Private Equity Committee, the ESG Committee, and the Geopolitical Governance Committee.

Alisa and I had a fascinating and thought-provoking conversation about private markets and working with the wealth channel. We discussed:
  • Why and how KKR came up with the Conglomerate structure.
  • Why the devil is in the detail when evaluating evergreen fund structures.
  • Why dealflow is essential if a firm wants to have an evergreen strategy.
  • Why education is so critical when working with the wealth channel.
  • How investors can balance evergreens and closed-end funds.
  • The skillsets required to manage evergreen structures.
  • Why culture is so critical when building a high-performing and consistent investment business.
  • The role that private markets can play in a portfolio and why that matters in today’s markets.
Thanks Alisa for coming on the podcast to share your wisdom and expertise on private markets.

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A word from AGM podcast sponsor, Ultimus Fund Solutions

This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.

To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.

Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at gharris@ultimusfundsolutions.com.

We thank Ultimus for their support of alts going mainstream.

Show Notes
00:00 Introduction and Message from our Sponsor, Ultimus
01:55 Welcome to the Alt Goes Mainstream Podcast
02:07 Introducing Alisa Wood
02:14 Alisa Wood's Background and Role at KKR
03:48 KKR's Office and Culture
06:05 Evolution of Private Equity
06:51 Early Days at KKR
08:26 Strategic Moves in Private Equity
12:41 Managing Evergreen Structures
13:58 Operational Complexity in Evergreen Funds
16:59 Deal Flow and Investment Strategies
21:37 Institutional vs. Individual Investors
23:44 Sales Cycle and Investor Relations
26:35 Employee Equity and Financial Literacy
29:41 Evolution of Private Equity Value Creation
30:17 Human Capital and Leadership
30:57 Building Community at Scale
31:59 The Importance of Returns and Connection
32:21 Building Community Through Hard Topics
32:46 Best in Class Advisors and Community Building
33:14 Shifting Business Strategies at KKR
33:47 The Role of Chief Economist and Macro Issues
34:24 Learning from Mistakes and Evolving
35:52 Integrating Resources for Better Investment Decisions
38:08 Strategic vs. Tactical Approaches
38:28 The 40-30-30 Framework
38:52 Challenges in Public and Private Markets
39:25 The Importance of Controlling Investments
39:51 Changing Market Correlations and Returns
40:47 The Complexity of Private Market Choices
41:45 The Role of Large Managers in Evergreens
44:42 Family-Owned Businesses and Evergreen Structures
47:58 Success in the Wealth Channel
49:40 Balancing Illiquidity and Investment Opportunities
50:05 The Psychology of Evergreen Investments
52:51 Growing the Evergreen Business
54:53 The Next Big Innovation: 401k Integration
55:42 The Importance of Education and Community
56:10 Defining Private Equity and Industry Standards
57:23 The Role of Trade Associations and Education
59:17 The Future of Private Market Investments
01:01:23 Real People, Real Money: The Impact of Private Markets

Editing and post-production work for this episode was provided by The Podcast Consultant.
2021