KKR teams up with ex-banker on debt platform

John Davison has left Royal Bank of Scotland to join Pillarstone as chief executive officer and co-investor, writes Anna Devine of Real Estate Capital’s sister publication, Private Debt Investor.

KKR Credit has hired John Davison to lead its recently launched pan-European debt platform, Pillarstone.

Davison, formerly global head of strategic investments at Royal Bank of Scotland, joins the platform as chief executive officer. He will also be a co-investor.

The platform aims to support banks in managing exposures to non-core and under-performing assets in corporate, real estate and shipping finance, by improving the performance and value of the businesses which underpin the exposures.

At present, there are €1.9tn of non-core and underperforming assets, including €1.2tn of non-performing loans, sitting on the balance sheets of European banks, KKR said.

In his previous role, Davison was involved in the turnaround of businesses in the corporate, real estate and shipping sectors, KKR added.

Johannes P. Huth, head of KKR Europe, Africa and Middle East, said: “We are excited to be teaming up with John Davison for Pillarstone. The UK was ahead of the curve in Europe in addressing the issue of non-performing loans, and John’s expertise played a big part in that.”

KKR has started work on the platform in Italy with UniCredit and Intesa Sanpaolo and is evaluating the opportunity in Europe. The Italian venture is expected to complete in early October, PDI understands.

The management and governance rights on up to €1bn in debt and equity exposures will be transferred to a vehicle but ownership will remain with the banks, thus the risk-weighted asset (RWA) rating requirement for the banks will not be reduced. Potential arrangements with other banks will be assessed on a case-by-case basis.

Mubashir Mukadam, head of special situations for KKR in Europe, said: “With John joining as CEO and co-investor, Pillarstone will now deepen and widen its roll-out on a pan-European scale.”

Davison added: “This is the perfect time for us to build out Pillarstone, which will provide significant economic benefits to a wide range of stakeholders right across Europe.”

Davison joined RBS in 2011 to head the private equity arm of the bank’s restructuring group. Prior to this, he held a leadership post with private equity firm Bridgepoint, which he left in 2009. He has also held roles at The Carlyle Group and Warburg Pincus.

Pillarstone is a portfolio company of funds and accounts managed or advised by KKR Credit.