KKR and PSP Investments Acquire Minor Stakes in Two US Power Transmission Companies

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Investments support infrastructure modernization and increased reliability

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The strategic partnership comes as demand for reliable energy rises in the US

NEW YORK — Today, investment funds managed by KKR, a leading global investment firm, and the Public Sector Pension Investment Board (“PSP Investments”), one of Canada’s largest pension investors, announced an agreement to acquire a 19.9% ​​interest at American Electric. Power’s (“AEP”) Ohio and Indiana & Michigan companies are worth $2.82 billion. Founded in 1906 and one of the largest electric utilities in the US, AEP has shaped the nation’s energy system by bringing safe, reliable and affordable power to millions of homes. The investment will support AEP’s ability to meet growing customer demand and improve grid reliability. KKR and PSP Investments formed a 50/50 strategic partnership to advance the acquisition.

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AEP is a fully regulated electric utility serving 5.6 million retail and wholesale customers in 11 states. Ohio, Indiana and Michigan are among AEP’s fastest-growing service areas driven primarily by America’s strong manufacturing industry and new sources of load growth. The investment by KKR and PSP Investments in the two transport companies will support AEP’s previously announced five-year customer incentive plan.

“We are very excited to be partnering with a top leader in transportation in the US, and we are impressed by AEP’s deep operational capabilities, experienced leadership team and history of innovation,” it said. Kathleen Lawler, Managing Director, KKR. “KKR’s infrastructure business has a long history of investing in post-energy transition and electrification opportunities, and this investment in AEP sits squarely at the intersection of these two trends. The flexibility and stability of the assets, coupled with the strong demand for electricity, make AEP’s transmission assets a good investment for KKR.”

“We are pleased to form this partnership with AEP to support its ambitious growth plan to build much-needed transmission infrastructure in a region that is facing major challenges from digitization and the transformation of key products,” it said. Michael Rosenfeld, Managing Director, Infrastructure Investments, PSP Investments. “This investment marks a significant milestone in PSP Infrastructure’s rollout of its High Inflation Correlated Infrastructure (“HICI”) strategy, which is focused on investing in North American core infrastructure assets that exhibit a protective and predictable income profile relative to inflation.”

“We are pleased to introduce this strategic partnership with two of the world’s leading global infrastructure investors. “KKR and PSP are experienced investors in the utilities and energy sectors with a proven track record of successful infrastructure investments,” said Bill Fehrman. AEP president and CEO. “This transaction allows AEP to finance a growing segment of our business and enhance our ability to serve growing customer needs and provide reliable service to our customers.”

Upon closing, AEP will remain the principal owner and operator of the transmission assets. KKR is funding this investment through its core infrastructure strategy.

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Moelis and Morgan Stanley acted as financial advisors and Simpson Thacher acted as legal advisor to KKR and PSP Investments.

About KKR

KKR is a leading global investment firm providing alternative asset management and capital markets and insurance solutions. KKR aims to generate attractive returns on investment by following a patient and systematic investment approach, employing world-class people, and supporting the growth of its companies and communities. KKR sponsors investment funds that invest in private equity, debt and real assets and has strategic partners managing hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. KKR’s investment portfolio may include the activities of its mutual funds and insurance subsidiaries. For more information about KKR & Co. Inc. (NYSE: KKR), please visit the KKR website at www.kkr.com. For more information about Global Atlantic Financial Group, please visit the Global Atlantic Financial Group website at www.globalatlantic.com.

About PSP Investments

The Public Sector Pension Investment Board (PSP Investments) is one of Canada’s largest pension investors with total assets of $264.9 billion under management as of March 31, 2024. It manages a diversified global portfolio comprised of capital market investments, private equity, real estate. , infrastructure, natural resources, and credit investments. Established in 1999, PSP Investments manages and invests funds transferred to it by the Government of Canada through the pension plans of the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Headquartered in Ottawa, PSP Investments has its main corporate office in Montreal and offices in New York, London and Hong Kong. For more information, visit investpsp.com or follow us on LinkedIn.

View the source version at businesswire.com: https://www.businesswire.com/news/home/20250109303908/en/

Contacts

Media:

KKR
Liidia Liuksila or Emily Cummings
(212) 750-8300
media@kkr.com

PSP Investments
Charles Bonhomme
+1 438 465-1260
media@investpsp.ca

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