KKR's private equity co-head says it's a great time to do deals, but be sure to exercise caution

Private equity firms should beryllium motivated to hunt for deals contempt the challenging involvement complaint situation arsenic the imaginable acquisition terms tends to beryllium much successful their favor, according to KKR's Global Co-Head of Private Equity Pete Stavros.

"This is simply a large clip to bash deals," Stavros said in an interview with CNBC's Leslie Picker for the Delivering Alpha newsletter. "When you privation to beryllium much cautious is erstwhile superior is everywhere. You tin get arsenic overmuch indebtedness arsenic you want. The recognition markets are reddish hot. The M&A marketplace you cognize is connected fire. Those are times to rise your barroom and beryllium a small spot much cautious."

Private equity fundraising has slowed down drastically aft a bid of assertive involvement complaint hikes made borrowing costs skyrocket. Globally, backstage equity funds raised $444.65 cardinal successful the archetypal half, down 20.5% twelvemonth implicit twelvemonth from, according to S&P Global Market Intelligence.

"When the nationalist markets are much volatile and erstwhile recognition markets are tighter, amended instrumentality deals are done. That's the history," Stavros said. "It's logical due to the fact that acquisition prices are constrained due to the fact that you can't get arsenic overmuch and the the wealth you tin get is much expensive. This is the clip to beryllium leaning it now.

KKR announced its latest exit woody that involved RBmedia, a audio-books steadfast that was sold to different investment firm H.I.G. Capital. The woody has an employee banal ownership program successful place.

Stavros said backstage equity investors shouldn't determine to beryllium connected sidelines oregon spell each successful based connected the marketplace environment, adding that KKR instituted a rigorous process of not over-deploying oregon under-deploying successful immoderate fixed year.

"One of the astir important points arsenic it relates to backstage equity M&A, my presumption is arsenic a backstage equity investor, you should not beryllium trying to clip the market," Stavros said.