KKR Europe chief looks to French deals as Brexit looms
Head of private equity group has moved from London to Paris and likes Macron reforms
The European head of KKR has said the US private equity group is more cautious about doing UK deals because of worries over Brexit, and is likely to invest more in France, attracted by the optimism generated by President Macron.
Johannes Huth moved from London to Paris earlier this year because of Brexit as well as for personal reasons. He said in a rare interview that the extra risks created by Brexit would be a factor when considering new UK investments at KKR. The group has $153bn of assets under management and orchestrated some of Europe’s biggest buyouts, including that of pharmacy chain Alliance Boots.
Mr Huth told the Financial Times that KKR has been buying UK businesses with significant exposure to foreign markets and therefore benefiting from the weaker pound.
He said: “Are we going to properly do our work and make sure that we take the uncertainty and the variety of factors into account? Absolutely. Brexit adds an extra layer, Catalonia adds an extra layer if you want to buy a business in Barcelona.”
Britain’s vote to leave the EU has pushed many Europeans to weigh up their future in the UK. In addition, earlier this year, the government abolished non-dom status for anyone living in Britain for at least 15 of the past 20 years, limiting their ability to keep offshore income out of the UK’s tax net.
All of this comes as President Macron sets out to overhaul France’s labour laws and tax regime to make it more attractive and business-friendly. The new government is scrapping the wealth tax on everything apart from property assets, and is trying to lure foreigners with its own non-dom regime.
“I am fascinated with what’s happening in France: I think Macron is a very positive influence in that country,” said Mr Huth, a German national who had been running KKR from London for nearly two decades before his move.
He added: “I was a strong Remainer and quite involved in the campaign. I was disappointed with the outcome.
“I hope there will be more business for us in France as that economy is picking up and maybe repeating the German transformation that we saw after Schröder.
“I think it will be useful to be a little bit more present there than doing that from [London].”
Mr Huth’s comments came after KKR bought two UK-headquartered businesses at the start of the year — chemicals distributor A-Gas and specialist holidays firm Travelopia. Both have meaningful exposure outside the UK.
His views come as KKR is getting ready to raise up to €5bn from investors in Europe in a flagship fund at the start of next year.