KBRA (Kroll Bond Rating Agency)

Private Equity Manager (GP)

Case study

About the company

Kroll Bond Rating Agency is one of the five global full-service credit rating agencies. The business was founded in 2010 with the aim of restoring trust in credit ratings by creating new standards for assessing risk and offering transparent ratings. It is differentiated through the quality and rigour of its research, its ability to rate niche asset classes with bespoke methodologies, and its competitive pricing.

Investment rationale

• The addressable market for credit rating agencies is large with very few players and significant barriers to entry.
• The company has a highly attractive financial profile, with a fixed cost business model and substantial pricing power, which leads to high EBITDA margins and strong cash flow generation.

Our relationship

• Pantheon has a long-standing relationship with Parthenon Capital Partners (“Parthenon”) and is an investor in several of their funds dating back to the early 2000s. Pantheon has also participated in several co-investments with the private equity manager and sits on two of its advisory boards.

Active management and value creation

• Parthenon has significant experience and an outstanding track record in the financial services sector, having made 25+ investments in financial services firms through its past six funds. With deep industry expertise and operational capabilities, Parthenon has the knowledge and resources to assist KBRA with its expansion.
• Parthenon sees numerous opportunities for growth in the business, including the penetration of new areas of the market, such as alternative asset managers and ESG ratings. In addition, international expansion and M&A are possible levers for value creation.