KKR's Elbow Grease Gamble on UK Wealth Buyout
Breakingviews: Elbow grease and luck required for 7 billion Hargreaves Lansdown deal
Aug 9 (Reuters) - The 7 billion pound ($8.5 billion) buyout of UK wealth manager Hargreaves Lansdown will require some heavy lifting to work. KKR & Co Inc (KKR.N) is betting that it can generate enough cost savings and revenue growth to justify the high price it is paying, but the path to success is far from certain.
One of the biggest challenges will be integrating Hargreaves Lansdown's platform with KKR's own wealth management business. The two companies have different cultures and operating models, and it will take time and effort to merge them successfully.
KKR will also need to find ways to grow revenue at Hargreaves Lansdown, which has been facing increasing competition from both traditional banks and fintech startups. The company's core business is based on charging clients a percentage of their assets under management, so it needs to attract new clients and retain existing ones in order to grow.
KKR is counting on its experience in the wealth management industry to help it turn around Hargreaves Lansdown. The firm has a track record of successfully integrating acquisitions and growing revenue at its portfolio companies. However, the UK wealth management market is a challenging one, and there is no guarantee that KKR will be able to replicate its past success.
Ultimately, the success of KKR's Hargreaves Lansdown deal will depend on its ability to execute on its integration and growth plans. The firm will need to work hard to overcome the challenges it faces, and it will need some luck along the way.
Comments