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KKR sold U.S. insurance brokerage USI Insurance Services to Aon for approximately $17 billion, recovering $3.3 billion after taxes. The deal is notable not just for its returns, but for its unusual structure: KKR held the stake for nine years using only its own corporate capital, rather than a fund raised from outside limited partners. While private equity firms typically commit only about 1% of a fund’s capital, KKR invested its own money, allowing it to pursue a bolt-on strategy of acquiring roughly 90 small and mid-sized insurance brokerages without maturity pressure. The approach is being called a “mini Berkshire” strategy, modeled after Berkshire Hathaway’s operating philosophy. In South Korea, the VC industry in particular is showing signs of increasing GP commitment ratios.
Key Elements
Global private equity fund (PEF) manager KKR has recovered six times its initial investment by selling U.S. insurance brokerage USI Insurance Services. The deal is drawing market attention not simply because of the returns. It’s the unusual investment structure: KKR held the stake for nine years using only its own corporate capital, not a fund raised from outside limited partners.
KKR announced on the 1st (local time) that it had agreed to sell USI to industry peer Aon. The transaction is valued at approximately $17 billion (about ₩22.8 trillion). Of that amount, KKR will actually pocket $3.3 billion (about ₩4.4 trillion) after taxes — a recovery of six times its initial equity investment.
A typical private equity fund manager raises capital from institutional investors such as pension funds, mutual aid associations, and insurance companies to form a fund. The manager’s own contribution to the fund is typically around 1% of committed capital. This is called a “GP commitment” — a mechanism to ensure the manager retains at least minimal skin in the game. For a ₩50 billion (approximately $37.2 million) fund, the manager’s share would be ₩500 million (approximately $370,000), with institutional investors providing the remaining ₩49.5 billion (approximately $36.9 million).
While managing the fund, the manager collects an annual management fee of 1–2% of assets under management. When a portfolio company is sold at a profit, the manager takes roughly 20% of the gains above the hurdle rate promised to investors (typically around 8% per year) as performance fees. Since the bulk of the principal comes from limited partners, the bulk of the profits also flows back to them.
KKR broke with this convention. In 2017, it acquired USI for $4.3 billion (about ₩5.8 trillion) alongside Canadian pension fund CDPQ, but KKR deployed its own corporate capital directly rather than through a fund. The company has not disclosed the specific equity investment amount or stake, but it added more of its own money in 2020, 2023, and 2025 to expand its position.
Had this been a fund investment, the capital would have been returned within a 5–7 year maturity window. But because KKR held the stake with its own money, it secured a nine-year runway. During that period, KKR executed a “bolt-on” strategy, acquiring roughly 90 small and mid-sized insurance brokerages and merging them into USI to drive up the company’s value. KKR said it recovered six times its initial equity investment, or 3.4 times when including subsequent capital injections. Working backwards from the recovery amount and multiple, KKR is estimated to have deployed roughly $1 billion (about ₩1.3 trillion) to reap $3.3 billion.
This approach is being called a “mini Berkshire” strategy in the market. It’s a structure where a company uses its own capital — not a fund — to buy businesses, hold them for the long term, and collect dividends, taking its name from Berkshire Hathaway, the company led by Warren Buffett. Berkshire owns insurance companies including auto insurer GEICO. Insurance companies collect premiums upfront and pay out claims much later, allowing the company to invest the accumulated float in the interim. Buffett used this capital as seed money to acquire businesses and rarely sell them, growing the company through that approach.
In fact, Berkshire has paid a dividend only once since Buffett took control in 1965 — a cash dividend of $0.10 per share (about ₩130) in 1967. Reinvesting surplus cash into new acquisitions and investments rather than paying dividends has been the core engine of Berkshire’s growth. Greg Abel, who succeeded Buffett as CEO in January, has maintained this stance. In his shareholder letter, he stated that Berkshire “will not pay a dividend as long as there is a reasonably high probability that each dollar of retained earnings will create more than one dollar of shareholder value.”
Major U.S. private equity firms have also begun building similar funding structures. KKR acquired U.S. insurer Global Atlantic in 2020, Apollo bought annuity insurer Athene, and Blackstone purchased a stake in AIG. Life insurance and annuity policies don’t require returning capital to policyholders for decades, and the promised rates are lower than the 8% annual hurdle that fund managers must first clear for limited partners. With this kind of long-term capital backing them, managers can inject additional capital to grow good businesses when they find them, and wait for the right price at exit without being pressured by timing. That translates into greater flexibility in investment strategy.
The trend of managers increasing their own capital commitments is also emerging in South Korea’s capital markets — though it’s more pronounced in venture capital than in the PE market. In the buyout market, where individual deals run into the hundreds of billions of won, a manager would need substantial accumulated capital to buy companies with its own money alone, and few South Korean managers have the capacity to deploy several hundred billion won or more purely from their own balance sheets. Moreover, most large South Korean managers are privately held, cutting off the option of issuing shares to raise capital.
VC firms, with relatively smaller investment sizes, find it easier to commit their own money. Capstone Partners’ “Capstone 2026 AI Innovation Investment Fund,” formed in April, includes ₩9.9 billion (approximately $7.4 million) of company money out of ₩50 billion (approximately $37.2 million) in commitments — twenty times the statutory minimum LP commitment ratio of 1% for venture investment funds. Daesung Startup Investments committed 38% to “Daesung W-Jump Up” and 23.6% to “Daesung Together Youth Startup.” Woori Venture Partners maintains a GP commitment ratio of around 15%. In the “KTBN No. 13 Venture Investment Fund” formed during its days as KTB Network, the firm put in ₩10 billion (approximately $7.4 million) of the ₩51 billion (approximately $38.0 million) total — a 19.6% share. That fund invested ₩4 billion (approximately $3.0 million) in Dalba Global in 2019 and sold its stake for ₩39.9 billion (approximately $29.7 million) in May last year, booking a gain of ₩35.4 billion (approximately $26.4 million).
An investment banking industryth the capacity to deploy several hundred billion won or more purely from company money,” adding, “Moreover, most large managers are privately held, so the path of issuing shares to grow capital isn’t open to them either.”
Industry observers see increasing self-capital investment ratios as advantageous for both maximizing returns and building trust with limited partners. When a manager puts its own money at risk, it becomes more disciplined in investment decisions, and it signals alignment of interests with LPs. KKR’s USI deal is being assessed as a case demonstrating that this “skin in the game” investment approach is fully viable even in the large buyout market, and that long-term holding can generate outsized returns.
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