Deal Central & Portfolio Central

Assunta Gaglione-Austin
Kathy Chang
Lily Yuen
July 20, 2012

The KKR Central IT team

The KKR Central team is a proprietary application
development and business intelligence team within global IT
Information Technology
Ed Brandman, CIO

Corporate IT,
Fund & Public
Reporting
Matt Barnoski

Asia
Arthur Wong

EMEA &
KCM IT
Scott Lazarz

Private Markets
Assunta
Gaglione-Austin
Kathy Chang
Lily Yuen
Zhang Dong
Chai
Gorugontula
Saurabh
Bhatla
Amar Shah

Infrastructure
Architecture
Jeff Negrete

Americas
Brad Boeye

Application
Architecture
Doug Grossman

KAM IT
Dan Moore
Ned Moran

Deal Central Overview

 Deal Central is used to track KKRs proprietary information about its

private markets pipeline and portfolio companies. It is a knowledge
management tool helping the firm monitor deal flow, investment
bank involvement and report progress on diligence and other deal
related discussions.
What does this mean for you?
A centralized place to track prospective deals and any new companies you
monitor, helping with resource allocation across teams and offices
Change investment status as it progresses through the pipeline
Keep quantitative information current and update qualitative status notes that
feed weekly senior management reports
Repository for final deal documentation (IC Memos, 100 Plans, PMC Memos, etc.)

Stages of an Investment
Company Status
Prospect

Portfolio

ExPortfolio

Deal Status
Monitor

Active

Priority

High
Priority

Completed/Eliminated

Ongoing status and commentary updates

Post IC
Memos

PMC
Reporting

Track Deal
Expenses

Post 100
Day Plan
Quarterly
Ownership
& Board
Seats

Reporting Samples
Deal flow stats are used by
senior PE management and
during capital raising efforts

Resource allocation tools

Aggregated
pipeline deal
flow over
time

Detailed weekly status reports support the MMM

6

Portfolio Central Overview

 Portfolio Central is a proprietary, customized web based application

that allows the firm to proactively monitor its private markets
portfolio companies
With the inception of Portfolio Central, KKRs portfolio reporting
process has become an industry-leading tool and a competitive
advantage providing critical management information for a diverse
set of KKR stakeholders, including our LPs.
KKRs Portfolio Central was a recipient of the 2011 CIO 100 award
(1). The award recognizes projects that advance business strategy
through the innovative use of IT.

(1)

Nash, S. Kim How KKR Used Data Mining For Competitive Advantage CIO.com 2 Sep 2011.
http://www.cio.com/article/688776/How_KKR_Used_Data_Mining_For_Competitive_Advantage

- Before and After

BEFORE

NOW

Various definitions of financials

presented.

Portfolio Central used as standard for

on boarding a new company.

Deal teams manually creating

charts and tables.

Portfolio Companies are directly

filing to Portfolio Central, leaving the
Deal Teams to review and approve
automated financials as opposed to
entering the data.

Members and the PMC were

receiving 70+ or more individual
emails each month

Senior management receives 70+

fewer emails a month

Creation of aggregate portfolio

reports were entirely manual
where a person was pulling each
individual memo and inputting the
information in a spreadsheet

We have systematically consolidated all

the data provided. Various stakeholders
receive an automated monthly
reporting package including trend
and stack-ranking reports.

Deal teams received requests

for the same information at
least 2x by various constituents

Users can generate their own reports on

and ad-hoc basis. There were 0 users
versus 41 users currently with around
1,500 automated reports generated.

Financial Filings

The Monthly* Process

What does this mean for you?

1
Reporting
template
emailed to
Portfolio
Company
and/or the
Deal Team

2
Populated
template
emailed
back to
Portfolio
Central

Template
accepted or
rejected by
the system

Draft
report(s)
sent to Deal
Team for
review

Deal Team
marks the
report
FINAL

Final report
emailed to
Deal Team;
financials
available to
all

1
2
3

Every month the portfolio company and / or deal team will receive an Excel reporting template from Portfolio Central.

4
5

You will be sent a draft financial report for the PMC (CPG/LPs on quarter ends).

Once you have populated all of the requested information, submit the completed Excel file to PortfolioCentral@kkr.com.
You will receive either a rejection notice or an acceptance notice. If the Excel file has been rejected, the reasons will be
cited (missing revenue, EBITDA, headcount, etc.) and you can resubmit.

Review and respond to the draft financial report email with either an updated version of the financials or the word final in
the body of the email.
The final version of the report will be sent to you and at this time the financials will be available to the firm.

* Select companies report on a quarterly process

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Deal & Portfolio Central Reporting

Things We Request from You:

Item

Reporting
Frequency

Reporting Audience

Portfolio Company
Financials

Monthly or Quarterly

PMC, PE, Capstone, KCM, CPG, LPs

Investor Relations, Macro Team,
Management Committee, Risk
Committee

Investment Committee
Base Case

At Transaction Close

Investment Committees, PE, PMC,

Capstone

Employee & Facilities

Information

Annually

Public Affairs, CPG, PE

Ownership and Board

Seat

Quarterly

Finance, PE, Legal, Regulators,

CPG

Investment Committee
Docs

Weekly

Investment Committees

Coming Soon
Deal Expense Tracking, Tax Contingencies, IB Fees and Form PF

12

Who uses the information you provide to us

Various constituents use the data. One-off requests
have come to us instead of Deal Teams
Examples of recurring and ad-hoc reports created
without directly reaching out to Deal Teams include:

PMC
Management
Committee

Risk
Committee

Capstone

Deal &
Portfolio
Central

Investment
Committee

Macro
Team

Capstone Margin monitoring; EBITDA flow through

PE Regional Heads Revenue and EBITDA on a

monthly and YTD basis and by country; Deal pipeline
and sourcing

CPG FTE Headcount; Quarterly Revenue,

EBITDA and Net Debt; LP1Pager

Investor Relations Calendar YTD Revenue &

EBITDA, Net Debt, Leverage, Debt Maturity; Employee
Growth

Public Affairs Annual ESG report ; Geographic

trend on employee and facility growth

KCM Portfolio wide debt pricing; Counterparty

exposure on revolvers; Projections on interest rate
exposure; Interest rate risk management and hedging
strategy; IB fees (coming soon)

Finance Ownership & Boardseats; Tax

Contingencies (coming soon)

Macro Team KKR GDP Forecast Model

Investment Committee Deal expense vs IC budget

tracking; IC review report

Risk Committee Debt maturity analysis and

exposure; Revenue and EBITDA correlation trend

Management Committee L3M Revenue and

EBITDA; Global Debt Exposure

Investor
Relations

Public
Affairs
KCM

PMC Monthly review of revenue, EBITDA, cash flow,

and leverage; Covenant headroom alerts

CPG

Dashboard

Finance

13

Regional
heads

Dashboard

Who uses the information you provide to us

Managem
ent
Committe
e

PMC
Capstone

Dashboard

Risk
Committe
e

Investme
nt
Committe
e

Deal & Portfolio

Central

Macro
Team

CPG

Investor
Relations

Dashboard

Public
Affairs

Finance
KCM

14

Regional
heads

Monthly
review of
revenue,
EBITDA,
cash flow,
and leverage

Covenant
headroom
alerts

Who uses the information you provide to us

Managem
ent
Committe
e

Risk
Committe
e

Capstone

Dashboard

Investme
nt
Committe
e

Regional
heads

Deal & Portfolio

Central

Macro
Team

CPG

Investor
Relations

Dashboard

Public
Affairs

Finance
KCM

15

Margin monitoring

PMC

Change in
EBITDA
impact on
Equity Value

Who uses the information you provide to us

Managem
ent
Committe
e

Risk
Committe
e

PMC
Capstone

Regional
heads

Dashboard

Investme
nt
Committe
e

Deal & Portfolio

Central

Macro
Team

CPG

Investor
Relations

Dashboard

Public
Affairs

Finance
KCM

Geographic
trend on
employee
and facility
growth

16

Who uses the information you provide to us

Managem
ent
Committe
e

Risk
Committe
e

Capstone

Dashboard

Investme
nt
Committe
e

Regional
heads

Deal & Portfolio

Central

Macro
Team

Projections on
interest rate
exposure

PMC

CPG

Investor
Relations

Dashboard

Public
Affairs

Finance
KCM

Interest rate risk

management and
hedging strategy

17

Who uses the information you provide to us

Managem
ent
Committe
e

Risk
Committe
e

PMC
Capstone

Dashboard

Investme
nt
Committe
e

Deal & Portfolio

Central

Macro
Team

CPG

Investor
Relations

Dashboard

Public
Affairs

Finance
KCM

18

Regional
heads

KKR GDP
model
created
using
portfolio
company
operating
metrics

Who uses the information you provide to us

Managem
ent
Committe
e

Risk
Committe
e

PMC
Capstone

Dashboard

Investme
nt
Committe
e

Regional
heads

Deal & Portfolio

Central

Macro
Team

Consolidated debt maturity

analysis and exposure

CPG

Investor
Relations

Dashboard

Public
Affairs

Finance
KCM

Trending revenue and

EBITDA correlation

19

Contact Information

Deal Central questions?

Please email: DealCentralSupport@kkr.com
Please note that this is NOT the same as emailing DealCentral@kkr.com, which will
automatically post your document, comment and/or vcard to the website.

Portfolio Central questions?

Please email: PortfolioCentralSupport@kkr.com
Please note that this is NOT the same as emailing PortfolioCentral@kkr.com, which is
used to automatically process the official monthly/quarterly financial templates for
portfolio companies only.

20

Q&A

Appendices

Deal Central FAQs

How to Add a Deal (1 of 2)

1
1

Investment Information

Status Summary Descriptions

High Priority - A deal that has been through the IC process several times and is in active negotiation. There
are specific target dates that the team is working towards to complete the transaction.

Priority - A deal that has been through the IC process at least once and has substantial resources and time
being committed to it.

Active - Early due diligence or idea phase. Resources have been committed to the effort and there is
ongoing research and analysis being done. There is meaningful attention being given to this effort.
Monitor: The bulk of the deals are expected to fall into this category. Research is in maintenance mode
including monitoring quarterly financials, press reports and comps in an industry

24

Company Name Company

Name, as it will appear in all
internal management
reporting
Deal Code Name Unique
code name
CKA- optional nickname used
for the company, it will
appear in certain reporting
Status refer to status
summary below
Industry - Companys
industry group. Sub Industry
is optional.
Rollup Company applies if
the investment is later
acquired by (or rolled up into)
an existing portfolio company
Office - Office(s) where the
coverage team is located
Country Location of the
company
Geography Based on the
companys geographic
location
Groupings Used to group
companies across industry
groups and geographies

How to Add a Deal (2 of 2)

2

Answer public company

information (Y/N)

Deal Information

25

Deal Status - refer to

earlier status summary
Deal Type e.g. P2P,
Secondary, Private Sale
Date Initiated defaults
to date of entry unless
otherwise populated
Transaction Describe the
transaction as you would
have it appear in weekly
Partner reporting
Transaction Size through
EBITDA as indicated
Process: e.g. Proprietary,
Limited Process, Auction

When a Deal becomes a Portfolio Company

4
Additional Portfolio
information:

Portfolio Type e.g. PE,

Capital Solutions, Credit,
Principal Investment, etc.
Headquarters as
described

5
Portfolio Information

26

Please ignore all fields

at left unless they are
highlighted in red
Highlighted fields are
all required for portfolio
companies and are
often aggregated for
reporting purposes.
They should be
populated as described.

How to Update Ownership and Board Seat Reports (Quarterly)

Update Tips:
All data is carried forward
from the previous quarter.
All data is summarized and
emailed to all Private Side
Executives. There is a
wall of shame for those
that do not finalize by the
due date.
If nothing has changed,
you need to finalize the
data by selecting Final
from the dropdown on the
left and then Save
Changes on the right.
If there have been
changes to ownership
percentages, board
membership or entity
structure, please note
these in the fields
provided. Then, select
Final on the left, and
Save Changes on the
right.

27

Submitting IC Memos to PE IC Docs for Central storage

Reminders are sent each Thursday to all PE Executives to post their

weekly deal updates and post all new IC memos to Deal Central

ONLY send IC documents to peicdocs@kkr.com, most easily

accomplished using bcc: when sending your report to the IC itself.

28