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KKR (KKR) leads the purchase of a $7.2 billion portfolio of super-prime recreational vehicle (RV) loans from BMO Bank National Association, part of BMO Financial Group. BMO purchased approximately $6.4 billion of senior notes collateralized by the sold loans. KKR's Asset-Based Finance (ABF) strategy focuses on privately originated and negotiated credit investments backed by large and diversified pools of financial and hard assets, offering diversification to traditional corporate credit and attractive risk-adjusted returns. KKR has made 73 ABF investments globally since 2016, with approximately $47 billion in ABF assets under management. The investment comes from KKR's credit funds and accounts, with Kennedy Lewis Investment Management LLC also participating in the transaction.
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NEW YORK--(BUSINESS WIRE)--
KKR, a leading global investment firm, today announced that funds and accounts managed by its credit business have led the purchase of a $7.2 billion portfolio of super-prime recreational vehicle (RV) loans from BMO Bank National Association, part of BMO Financial Group (“BMO”). Concurrently with the sale, BMO purchased approximately $6.4 billion of senior notes collateralized by the sold loans. BMO will remain the servicer of the loans and will continue to originate and manage RV loans, with no expected impact to dealers, borrowers, and employees.
This transaction aligns with KKR’s Asset-Based Finance (ABF) strategy, which focuses on privately originated and negotiated credit investments that are backed by large and diversified pools of financial and hard assets, offering diversification to traditional corporate credit and attractive risk-adjusted returns. KKR has made 73 ABF investments globally since 2016 through a combination of portfolio acquisitions, platform investments and structured investments. The firm has approximately $47 billion in ABF assets under management and a team of more than 50 professionals directly involved in the ABF effort globally.
“This investment directly highlights the strength and scale of our Asset-Based Finance business, which has experienced unprecedented growth alongside the rapid expansion of this market,” said Dan Pietrzak, Global Head of Private Credit at KKR.
“We look forward to continuing to build on our 30-year history as a leading provider of consumer financing in the recreational market and strong network of dealer relationships across the United States,” said Tami Farrow, Head U.S. Indirect Lending. “This transaction enables us to further optimize BMO’s balance sheet to support future growth across the bank.”
“We are proud to serve as a strategic partner to banks as they focus on optimizing their balance sheets” said Avi Korn and Chris Mellia, Co-Heads of U.S. Asset-Based Finance at KKR. “We believe this portfolio of high-quality, fixed rate assets is a strong fit for our long-term private capital and yet another example of the compelling opportunity set that we’re seeing in Asset-Based Finance.”
KKR’s investment comes from its credit funds and accounts. Kennedy Lewis Investment Management LLC also participated in the transaction, alongside KKR and other investors.
About KKR
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group’s website at www.globalatlantic.com.
About BMO Financial Group
BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.3 trillion as of October 31, 2023. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society.
What is the value of the portfolio of RV loans purchased by KKR from BMO Bank National Association?
KKR led the purchase of a $7.2 billion portfolio of super-prime recreational vehicle (RV) loans from BMO Bank National Association.
Who participated in the transaction alongside KKR in the purchase of the RV loans portfolio?
Kennedy Lewis Investment Management LLC also participated in the transaction alongside KKR and other investors.
What is KKR's Asset-Based Finance (ABF) strategy?
KKR's ABF strategy focuses on privately originated and negotiated credit investments backed by large and diversified pools of financial and hard assets, offering diversification to traditional corporate credit and attractive risk-adjusted returns.
How much has KKR invested in ABF assets globally since 2016?
KKR has made 73 ABF investments globally since 2016, with approximately $47 billion in ABF assets under management.
What type of funds and accounts did KKR use for the investment?
KKR's investment comes from its credit funds and accounts.
founded in 1976 and led by henry kravis and george roberts, kkr is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. kkr aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world‐class people, and driving growth and value creation at the asset level. kkr invests its own capital alongside its partners' capital and brings opportunities to others through its capital markets business. references to kkr's investments may include the activities of its sponsored funds. for additional information about kkr & co. l.p. (nyse:kkr), please visit kkr's website at www.kkr.com. twitter: @kkr_co
