Download pdf - Deal Central and Portfolio Central Training

8/10/2019 Deal Central and Portfolio Central Training

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Deal Central & Portfolio CentralAssunta Gaglione-AustinKathy Chang

Lily Yuen

July 20, 2012


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Deal Central Overview


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Deal Central is used to track KKRs proprietary information about its

private markets pipeline and portfolio companies. It is a knowledgemanagement tool helping the firm monitor deal flow, investmentbank involvement and report progress on diligence and other dealrelated 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 thatfeed weekly senior management reports

Repository for final deal documentation (IC Memos, 100 Plans, PMC Memos, etc.)


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Prospect Portfolio Ex-Portfolio

Monitor Active PriorityHigh

Priority

Completed/Eliminated

Company Status

Deal Status

QuarterlyOwnership& BoardSeats

Post ICMemos

Track DealExpenses

PMCReporting

Post 100Day Plan

Ongoing status and commentary updates

Stages of an Investment


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Reporting Samples

Aggregatedpipeline dealflow overtime

Detailed weekly status reports support the MMM

Deal flow stats are used bysenior PE management andduring capital raising efforts

Resource allocation tools


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Portfolio Central Overview


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Portfolio Central is a proprietary, customized web based application

that allows the firm to proactively monitor its private marketsportfolio companies

With the inception of Portfolio Central, KKRs portfolio reportingprocess has become an industry-leading tool and a competitiveadvantage 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 strategythrough 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
http://www.cio.com/article/688776/How_KKR_Used_Data_Mining_For_Competitive_Advantagehttp://www.cio.com/article/688776/How_KKR_Used_Data_Mining_For_Competitive_Advantagehttp://www.cio.com/article/688776/How_KKR_Used_Data_Mining_For_Competitive_Advantage


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- Before and After

BEFORE NOW

Various definitions of financialspresented.

Portfolio Central used as standardforon boarding a new company.

Deal teams manually creatingcharts and tables.

Portfolio Companies are directlyfiling toPortfolio Central, leaving theDeal Teams to review and approveautomated financials as opposed toentering the data.

Members and the PMC werereceiving 70+ or more individualemails each month

Senior management receives 70+fewer emails a month

Creation of aggregate portfolioreports were entirely manualwhere a person was pulling eachindividual memo and inputting the

information in a spreadsheet

We have systematically consolidated allthe data provided. Various stakeholdersreceive an automated monthlyreporting package including trend

and stack-ranking reports.

Deal teams received requestsfor the same information atleast 2x by various constituents

Users can generate their own reports onand ad-hoc basis. There were 0 usersversus 41 users currently with around1,500 automated reports generated.


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What does this mean for you?

Financial Filings The Monthly*Process

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

- Once you have populated all of the requested information, submit the completed Excel file to [email protected].

- You will receive either a rejection notice or an acceptance notice. If the Excel file has been rejected, the reasons will becited (missing revenue, EBITDA, headcount, etc.) and you can resubmit.

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

- Review and respond to the draft financial report email with either an updated version of the financials or the word final inthe 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

Reportingtemplate

emailed toPortfolioCompanyand/or theDeal Team

Populatedtemplateemailedback toPortfolioCentral

Templateaccepted orrejected bythe system

Draftreport(s)

sent to DealTeam forreview

Deal Teammarks the

reportFINAL

Final reportemailed toDeal Team;financials

available toall

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mailto:[email protected]:[email protected]


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Deal & Portfolio Central Reporting


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Things We Request from You:

ItemReportingFrequency

Reporting Audience

Portfolio CompanyFinancials

Monthly or Quarterly PMC, PE, Capstone, KCM, CPG, LPsInvestor Relations, Macro Team,Management Committee, RiskCommittee

Investment CommitteeBase Case

At Transaction Close Investment Committees, PE, PMC,Capstone

Employee & FacilitiesInformation

Annually Public Affairs, CPG, PE

Ownership and BoardSeat

Quarterly Finance, PE, Legal, Regulators,CPG

Investment CommitteeDocs

Weekly Investment Committees

Coming Soon

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


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Who uses the information you provide to usVarious constituents use the data. One-off requestshave come to us instead of Deal Teams

Examples of recurring and ad-hoc reports createdwithout directly reaching out to Deal Teams include:

PMCMonthly review of revenue, EBITDA, cash flow,

and leverage; Covenant headroom alerts

Capstone Margin monitoring; EBITDA flow through

PE Regional HeadsRevenue and EBITDA on amonthly and YTD basis and by country; Deal pipelineand sourcing

CPGFTE Headcount; Quarterly Revenue,EBITDA and Net Debt; LP1Pager

Investor RelationsCalendar YTD Revenue &EBITDA, Net Debt, Leverage, Debt Maturity; EmployeeGrowth

Public AffairsAnnual ESG report ; Geographictrend on employee and facility growth

KCM Portfolio wide debt pricing; Counterpartyexposure on revolvers; Projections on interest rateexposure; Interest rate risk management and hedgingstrategy; IB fees (coming soon)

FinanceOwnership & Boardseats; Tax

Contingencies (coming soon)

Macro Team KKR GDP Forecast Model

Investment Committee Deal expense vs IC budgettracking; IC review report

Risk CommitteeDebt maturity analysis andexposure; Revenue and EBITDA correlation trend

Management CommitteeL3M Revenue andEBITDA; Global Debt Exposure

Deal &PortfolioCentral

PMC

Capstone

Regionalheads

CPG

InvestorRelations

PublicAffairs

KCM

Finance

MacroTeam

InvestmentCommittee

RiskCommittee

Management

Committee

Dashboard

Dashboard


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Who uses the information you provide to us

Deal & PortfolioCentral

PMC

Capstone

Regionalheads

CPG

InvestorRelations

PublicAffairs

KCM

Finance

MacroTeam

Investment

Committee

RiskCommitte

e

Management

Committee

Dashboard

Dashboard

Monthlyreview of

revenue,EBITDA,

cash flow,and leverage

Covenantheadroom

alerts


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Margin monitoring


PMC

Capstone

Regionalheads

CPG

InvestorRelations

PublicAffairs

KCM

Finance

MacroTeam

Investment

Committee

RiskCommitte

e

Management

Committee

Dashboard

Dashboard

Change inEBITDA

impact onEquity Value


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PMC

Capstone

Regionalheads

CPG

InvestorRelations

PublicAffairs

KCM

Finance

MacroTeam

Investment

Committee

RiskCommitte

e

Management

Committee

Geographictrend onemployeeand facility

growth

Dashboard

Dashboard


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PMC

Capstone

Regionalheads

CPG

InvestorRelations

PublicAffairs

KCM

Finance

MacroTeam

Investment

Committee

RiskCommitte

e

Management

Committee

Dashboard

Dashboard

Projections oninterest rate

exposure

Interest rate riskmanagement andhedging strategy


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PMC

Capstone

Regionalheads

CPG

InvestorRelations

PublicAffairs

KCM

Finance

MacroTeam

Investment

Committee

RiskCommitte

e

Management

Committee

Dashboard

Dashboard

KKR GDPmodelcreatedusing

portfolio

companyoperatingmetrics


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PMC

Capstone

Regionalheads

CPG

InvestorRelations

PublicAffairs

KCM

Finance

MacroTeam

Investment

Committee

RiskCommitte

e

Management

Committee

Dashboard

Dashboard

Consolidated debt maturityanalysis and exposure

Trending revenue andEBITDA correlation


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Contact Information

Deal Central questions?Please email: [email protected]

Please note that this is NOT the same as emailing [email protected], which willautomatically post your document, comment and/or vcard to the website.

Portfolio Central questions?Please email: [email protected]

Please note that this is NOT the same as emailing [email protected], which isused to automatically process the official monthly/quarterly financial templates forportfolio companies only.
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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Q & A


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Appendices


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Deal Central FAQs


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How to Add a Deal (1 of 2)

Investment Information

Company Name CompanyName, as it will appear in allinternal managementreporting

Deal Code Name Uniquecode name

CKA- optional nickname usedfor the company, it willappear in certain reporting

Status refer to status

summary below Industry- Companys

industry group. Sub Industryis optional.

Rollup Company applies ifthe investment is lateracquired by (or rolled up into)an existing portfolio company

Office - Office(s) where thecoverage team is located

Country Location of thecompany

GeographyBased on thecompanys geographiclocation

GroupingsUsed to groupcompanies across industrygroups and geographies

Status Summary Descriptions

High Priority - A deal that has been through the IC process several times and is in active negotiation. Thereare 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 timebeing committed to it.

Active - Early due diligence or idea phase. Resources have been committed to the effort and there isongoing 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 modeincluding monitoring quarterly financials, press reports and comps in an industry

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How to Add a Deal (2 of 2)

Answer public companyinformation (Y/N)

Deal Information Deal Status - refer to

earlier status summary

Deal Type e.g. P2P,Secondary, Private Sale

Date Initiated defaultsto date of entry unlessotherwise populated

Transaction Describe the

transaction as you wouldhave it appear in weeklyPartner reporting

Transaction Size throughEBITDAas indicated

Process: e.g. Proprietary,Limited Process, Auction

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When a Deal becomes a Portfolio Company

Additional Portfolioinformation:

Portfolio Type e.g. PE,Capital Solutions, Credit,Principal Investment, etc.

Headquarters asdescribed

Portfolio Information Please ignore all fields

at left unless they arehighlighted in red

Highlighted fields areall required for portfoliocompanies and areoften aggregated forreporting purposes.They should bepopulated as described.

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How to Update Ownership and Board Seat Reports (Quarterly)

Update Tips:

All data is carried forwardfrom the previous quarter.

All data is summarized andemailed to all Private SideExecutives. There is a

wall of shame for thosethat do not finalize by thedue date.

If nothing has changed,you need to finalize thedata by selecting Finalfrom the dropdown on theleft and then SaveChanges on the right.

If there have beenchanges to ownershippercentages, board

membership or entitystructure, please notethese in the fieldsprovided. Then, select

Final on the left, andSave Changes on theright.


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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 [email protected], most easilyaccomplished using bcc: when sending your report to the IC itself.
mailto:[email protected]:[email protected]