KKR Client & Partner Group

Overview
Suzanne O. Donohoe
July 20, 2012

CONFIDENTIAL

Who Are We?

Established in 1976, Kohlberg Kravis Roberts & Co. L.P. (KKR) is a leading global
investment firm with industry-leading investment experience, in-depth industry
knowledge, sophisticated processes for growing and improving businesses, and a strong
culture committed to teamwork

Leading investment firm

Private Equity, Infrastructure & Natural Resources,
Credit Strategies, Alternative Credit, Equity Strategies

Assets Under Management

As of March 31, 2012
($ in billions)

Global presence
Offices in 14 major cities in 9 countries across 4 continents

One-firm culture that evolves, learns, and innovates

Adaptive to change

$16.3

Relationship-driven approach
Sourcing investment opportunities
Partnering with clients

$46.0

Aligned with our partners

Eat our own cooking
Economic incentives driven by results
Focused on managing stakeholder interests

Private Markets

Public Markets

Client and Partner Group Overview

Client and Partner Group (CPG) Summary

Since 2005, KKR has raised over $44.5 billion

Current fundraises include: North America Fund XI, Asian Fund II, Energy Income and
Growth, Special Situations, Corporate Credit Partners, Lending Partners, and Equity
Strategies, in addition to ongoing SMA work

CPG, working closely with KKR Capital Markets, is active in numerous situations
including refinancings, potential IPOs, and syndication processes

Through CPG, we have fundamentally changed the way KKR does business with our
clients and prospects

We are focused on creating lasting partnerships in which relationships are

managed continuously moving away from the episodic fundraise model

How we distribute products and raise capital is becoming a clear differentiator for
KKR

CPGs long-term goal is to diversify KKRs client base to include new investors, across
all regions and institution types, and to raise capital for the firms expanding product
platform

KKRs Investment Options and Capabilities

KKR Private Equity,
Infrastructure, Natural Resources

KKR
Capstone

Bank Loans Plus High Yield

Global Private Equity

(KKR 2006 Fund and

KKR North America Fund XI(1))

European Private Equity

(KKR European Fund III
and KKR E2 Investors)

Asian Private Equity

(KKR Asian Fund, KKR Asian Fund

II(1) and KKR China Growth Fund)

Global Infrastructure
(KKR Global Infrastructure Investors)

(KKR Corporate Credit Partners(1))

KKR Capital
Markets
(KCM)

Energy Income and Growth

Customized Portfolio
Solutions(1)
Separately Managed
Accounts(1)
(1)

Bank Loans(1)
High Yield(1)

Client &
Partner
Group
(CPG)

Opportunistic Credit(1)
Direct Lending

(KKR Lending Partners(1))

Natural Resources

(KKR Natural Resources Fund)

KKR Asset Management (KAM),

Public Equity, Credit & Mezzanine

Stakeholder
Management

Mezzanine

(KKR Mezzanine Partners)

Special Situations

(KKR Special Situations Fund L.P.(1))

Global Macro
& Asset
Allocation

Indicates Fund actively fundraising or strategy available as a separate account.

Public Equity

(KKR Equity Strategies(1))

Separately Managed
Accounts(1)

Three Years Ago

We had a handful of people selling (full or part time)

Relative to our peers, we had a small number of LPs/clients

We sold only PE products and did so episodically
Along with our industry, we received low marks for transparency and servicing

$16
KKR PE Capital

$12

$8

$4

$0
2000
PE Market Share
2%
%

2001

2002

2003

3%

3%

5%

2004

2005

2006

2007

2008

0%

4%

7%

2%

3%

And we knew the world was changing dramatically

6

Our Strategic Assessment Back Then

Far too few people selling given the firms ambitions
Our focus became:
Upgrading in some cases
Hiring more salespeople and senior product expertise
Creating a regional focus and accountability for each person
Developing product management functions and disciplines
Doing it with the proper leverage and support to ensure sales effort was as effective as
possible

CPG Structure

KKR Organizational Chart Where Does CPG Fit In?

Management Committee (MC)

Kravis/Roberts

Investment Committees (ICs)

Other Governance Committees
(e.g. Conflicts, Risk, Balance Sheet)

Global
Infrastructure/
Natural
Resources

Global Capital
& Asset
Management
(Nuttall)

Global
Private Equity

Global Portfolio
Management

(Lipschultz)

Global Chief
Administrative
Officer

(Bae, Huth,
Michelson,
Navab)

(Raether)

(Fisher)

KKR Capstone

Asset
Management
(Sonneborn)

Leveraged
Credit
(Falk/
Sheldon)

Client and
Partner Group
(Donohoe)

Mezzanine
(Goltz)

Capital
Markets
(Farr)

Special
Situations
(Weinstein/
Zilkha)

Industry/Functional Teams

Public
Equities
(Howard)

North
America
(Nelson)

Europe/
MENA
(Cornog)

Asia/
Pacific
(Bookmyer)

Industry/Functional/
Regional Teams

Public Affairs
(Mehlman)

Legal and
Compliance
(Sorkin)

North
America
(Michelson/
Navab)

Europe/
MENA
(Huth)

Asia/
Pacific
(Bae)

Industry/Regional Teams

Finance
(Janetschek)

Information
Technology
(Brandman)

Human
Resources
(Gottlieb)

CPGs Current Structure

Ford Fraker
Sr. Advisor,
ME

Asia
Clifford Chiu

Middle East
Kaveh Samie

Europe
Alex Fletcher

Rex Chung

Sales Support

Stanley Ho

Amine
Habiballah

Chloe
Lavedrine

Lucy Liu
Masaki Sugita
Tina Xiong
Nobuaki
Miyatake

Client & Partner Group

Ruud Hendriks
Sr. Advisor,
Europe

Jurcell Virginia
Doug Watt
Winnie Wutte

Lew Eisenberg
Sr. Advisor,
HNW

Suzanne Donohoe

North
America
Amy Lesch

Private
Markets
Product
Specialists
Alisa Wood

Tony Hass

Private Equity

Ari Barkan

Alisa Wood /
Amy Stuart

Dan McLaughlin
Janice Roberts
JB Kiley

Sales Support

John Morrison

James Marsh

Lesley Nurse

Sales Support

Dan Parant

Gaurav Singh

Mariko Uyeda (PT)

Sales Support
Jackie Barrett
Jessica Polkow
Ralph DeBernardo

Infra & Oil & Gas

Henry Hager

Public Markets
Product
Specialists
Leveraged Credit
& Special Sits
Lynette
Vanderwarker
Special Situations
- Jessica
Siebel(PT)
Equity Strategies
John Massad
Mezzanine
Amy Lesch (PT) /
Mariko Uyeda (PT)
Product Support
Christina Fang
Wilson Tong
Nicole Fay

Global
Shared
Services
Alisa Wood
Event Planning &
Client Services
Annette
Guarnaccio & Kate
de Mul
BDS Beth
Hammond
GSD Amy Stuart
Product Support
Sharon Yang
Brandon
Donnenfeld
Monica Davis
Sean Nelson
Tiffany Yu
BDS - Support
Katie Hotze
Ryan Carlson

Event Planning / Client Services

Lusha Roy, Linda Baath, Melanie Grigonis, Kathleen Haber, Maura McCabe, Gena Vacanti

Note:

10

As of June 2012.

High Net
Worth
Jim Burns
Rick Moreno
Zachary Pack
Jeff Schachter
Sales Support
Conway Bate

Advisory Efforts/
Customized PE
Portfolio
Solutions
Saleena Goel

In Line with the Firms Ambitions, What We Sell has Evolved

Number of Products Offered by Year
16
Funds

14

SMAs / Other

12

?
10
8

4
4

6
4
1

2
0

11

2002

2003

2004

2005

2006

2007

2
2008

3
2009

2010

2011

2012
Target

CPG Model

12

Three Main Areas of Focus

1) Open New Relationships

2) Cross Sell Into Existing Relationships

3) Maintain Existing Clients

13

Primary Activities

Facilitate client access to products and services across KKRs platform

Apply integrated approach by leveraging all KKR executives and capabilities globally
including:
Industry investment teams expertise
KKR Capstones operational best practices
KCM market perspectives

Work in partnership with KCM in the syndication/distribution of products including:

Participation in debt or equity distributions
Placement of mezzanine tranches
Co-investment opportunities

14

CPGs Coverage Model

The CPG Teams goal is to have one multi-layered team distributing all products
globally

Team-wide collaboration on LP relationships will help us determine the best way to be

a solutions provider to each of our clients

We do not view our ideal model as episodic, but rather as constant

Client

Relationship Managers
maintain relationships and
serve as first touch-points with
clients

Relationship Manager
and Relevant
Member/MD/Director

Members, MDs, and

Directors are involved with
certain relationships to provide
further resources/depth

Industry Expert

Product Specialists and Industry Experts join

meetings for deeper diligence and to build client
comfort around product offerings

15

Prepares presentations,
PPMs, diligence requests, etc.

Sales Support serves as a

team of Associates/Analysts
dedicated to assisting RMs with
territory management, client
support and monitoring

Associate/Analysts
Product
Specialist

GSD / Product Support

serves as a central team of
Associates/Analysts dedicated
to assisting Product Specialists
and the RMs with productspecific capital raising efforts

Our Client Base and Opportunities

for Growth

16

The Vast Opportunity in Front of KKR

The market opportunity is vast for KKR

$33.6 trillion in institutional investable assets globally, even if addressable market

globally is only 3% of that or $1 trillion, we have much room to run(1)

We have a number of competitive advantages that should help us to penetrate this

opportunity set

We have a strong brand associated with intellect, wealth creation, and powerful
relationships

We have talented and motivated professionals incentivized to succeed

We have a willingness to invest in the future

We are capable of being Liked & Trusted

with the proper investment of time and resources

(1) The total is taken from BCG 2011 Global Asset Management Report, inclusive of all institutional assets including banks and financial services.

17

Current Situation Our LPs

Our current LP/client base is concentrated and North America-focused

(1)
Less than 420 LPs/clients of the firm in total

Investor Base by Type

Family
Office/HNW
6%

Fund of Funds
8%

Endowment /
Foundation
1%

Middle East
5%

Asia Pacific
21%

Financial
Institution/
Insurance
20%

C orporate
Pension
3%

18

Investor Base by Geography

Public Pension
Agency/
Sovereign
Wealth
Fund/Other
Governmental
62%

North
America
60%
Europe
14%

What Trends Our Clients Are Thinking About

Low-return and High-volatility environment focus on alternatives
Global Macro investing environment and European stability
Emphasis on diversification of asset classes
Concern over conflicts/transparency
Growth and diversification of sovereign wealth funds/other
government entities
Flight to quality managers and brands post-crisis
Investors desire to leverage and scale relationships

19

Realizing Our Cross-Sell Potential

Large opportunity to bring existing investors into other products on the

KKR platform

2011

1.5(1)
average
mandates per
investor(2)

(1)
(2)

20

2012

2013

2014

2015

2016

2.0 target
average
mandates per
investor

Data as of December 31, 2011.

Defines successor funds in a particular geography as same strategy, but new geographies, new asset classes, or new strategies as cross-sell.

Growing Our Investor Franchise

Average New Mandates per

Year

Investors/Mandates as of
January 1, 2012

New Investors

Existing Investors

2016 Aspirational
Target Mandates

21

~350 x 1.5

500-525

First Year:
What We
Delivered

~35/year over
five years

175

45

~50-60/year
over five years

250-300

80

~1,000

~625

Industry Flows into Illiquid Assets have been Highly Cyclical

Buyout
$600

Distressed Debt
Fund of Funds
Infrastructure

$ in billions

$500

Mezzanine
Other
Real Estate

$400

Special Situations
Venture

$300

$200

$100

$2000

22

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

and the Buyout Market Even More So

$250

$239

$235

$220
Buyout Capital Raised

$ in billions

$200

$150

$141

$109
$100

$95
$76
$57

$69

$62

$50

$71

$44

$2000

23

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Which is a Major Reason to Diversify Our Business

($ in billions)

Buyout

Pre 2009

2009 - 2011

2012 + Beyond

Global AUM

Global AUM

Global AUM

1.6%

$912

1.6%

$912

Mezzanine

0.1%

$68

0.1%

$68

Infrastructure

0.3%

$170

0.3%

$170

Leveraged
Credit

3.5%

$2,000

3.5%

$2,000

Hedge Funds

2.8%

$1,581

2.8%

$1,581

Distressed PE

0.3%

$146

Real Estate

0.5%

$274

9%

$56,407

Total
Penetration
24

1.6%

1.6%

$912

$56,407

8.3%

$56,407

Our Market Share Seems to be Growing

2006 Fund (Vintage 2006),
Asian Fund (Vintage 2007)

$16

KKR Buyout Capital Raised

& Market Share %

$ in billions

$12

European Fund II
(Vintage 2005)

European Fund III

(Vintage 2008)

$8

NA Fund XI
(Vintage 2011)

Annex Fund
(Vintage 2009)

Millennium Fund
(Vintage 2002)

China Growth
(Vintage 2010)

$4

3%

5%

4%

4%

4%

9%

$0
2000

25

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

We are Working on a Lot This Year

Targeting gross sales of $10 billion in Fee Paying AUM across all
investment areas, including:

65% to Private Equity

10% to Real Assets

25% to Public Markets

2012 Product Set

First Close Completed

NA XI
Direct Lending
Infrastructure
Natural Resources
Asia II

26

Incubating & Seeding

Working Towards
First Closes

Continuously
Marketing

Real Estate

Special Situations

Liquid & Opportunistic

Credit Strategies

Energy Income &

Growth

KES

Long/Short Credit

CPS

Opportunities to Grow Over the Medium Term

Only one scaled business and ~420 clients!
1) Under-tapped markets and channels
2) Broader set of products

3) Holistic solutions-based partnerships

4) Capital markets prowess
5) Morphing our brand from mega buyouts only to broad alternatives provider

27

Where are we spending our time?

28

YTD Activity Metrics

Team has held over 2,623 meetings in 2012 YTD(1)

A monthly average of 22.7 meetings or scheduled calls per RM(2)

Meetings by Region

Meetings by Strategy

% of YTD Meetings by Region

% of YTD Meetings by Product

Type

Asia /
Australia
26%

EMEA,
22%

Other
19%

Private Equity,
Private
41% Equity

North America, North

America
48%
52%

Asia,
30%

Europe /
Middle East
22%

(1)
(2)

29

45%

Private
Markets
7%

10%

KAM
29%

As of June 2012.
Applies an estimated weighting to CPG members with other non-RM related responsibilities (e.g. Management).

KAM,
17%

CPG Mandate Summary YTD as of June 2012

Mandate Summary
Awarded / Not Yet Funded(1)(3)
Number
Amount ($mm)

Signed / Funded (2)(3)

Number
Amount ($mm)

Total
Amount ($mm)

This Week(4)

This Month(4)

100

25

2537

2,637

16

589

90

3,887

4,476

This Year

Meeting Summary
Month to Date (6/1/12 - 6/29/12) - Total CPG meetings:

384

Of which, meetings with existing investors:

186

Of which, meetings with prospects:

177

Of which, meetings with consultants:

Year to Date (1/1/12 - 6/29/12) - Total CPG meetings:

21
2,798

Of which, meetings with existing investors:

1,363

Of which, meetings with prospects:

1,226

Of which, meetings with consultants:

209

(1) Verbal commitments, but still working through legal documentation.

(2) Signed commitments on which we have begun to earn fees, where we charge on invested capital or where documentation is complete and investment team can allocate to a deal at any moment.
(3) Does not include co-investments which do not charge Management Fees (Transaction & Monitoring Fee Only or "T&M Fee").
(4) Does not include HNW commitments.
(5) Mercer acted as the consultant for 1 HNW mandate totaling $25mm to KES.

30

Capital Raising Momentum and 2H12 Game Plan

Final close on the Global Infrastructure Fund and the Natural

Resources Fund (occurred on May 31st, 2012)

First close for the Special Situations Fund (currently anticipated in

September 2012) and the Energy Income and Growth Fund
(timing TBD)

Interim closes on North America Fund XI Fund, Asian Fund II and

Lending Partners

Continue to focus on raising capital for continuously offered KAM

strategies (KES, Corporate Credit Partners and SMAs)

Initial Integration of Prisma Capital Partners

31