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Kayne Anderson Capital Advisors Review

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Kayne Anderson Capital Advisors, LP

Kayne Anderson Capital Advisors, LP (KACALP) is a financial advisor firm in Los Angeles, California that principally manages pooled investment vehicles, like hedge funds and private equity funds. It also has a few institutional and high-net-worth individual clients. Around 130 advisors work at the firm, and it has around $25 billion in assets under management (AUM).

Kayne Anderson Capital Advisors Background

Kayne Anderson Capital Advisors first opened its doors in 1984. It was founded by Richard Kayne, who holds the position of co-chairman to this day. CEO Michael Levitt, co-chairman Robert Sinnott and Kayne collectively own around 80% of the firm's shares, and the rest is split between roughly 30 people.

The firm has a massive group of investment advisors on staff. Among these advisors, you'll find chartered financial analysts (CFAs), certified public accountants (CPAs) and chartered alternative investment analysts (CAIAs).

What Types of Clients Does Kayne Anderson Capital Advisors Accept?

Currently, Kayne Anderson Capital Advisors works with nearly pooled investment vehicles, which are investment funds in which money from many different investors are aggregated for the purposes of investing. These include hedge funds, private equity funds and real estate funds.

On a more limited basis, the firm also counts high-net-worth individuals, investment companies, pension and profit-sharing plans, charitable organizations, government entities, other investment advisors, insurance companies and corporations as clients.

Kayne Anderson Capital Advisors Minimum Account Size

To take part in any of the investment funds that Kayne Anderson Capital Advisors manages, prospective clients will need anywhere from $250,000 to $5 million in investable assets. To open a separate account with the firm, there's no explicitly stated minimum requirement. However, the firm doesn’t currently work with any non-high-net-worth individuals.

Services Offered by Kayne Anderson Capital Advisors

Kayne Anderson specializes in alternative investing, primarily through private investment funds and less frequently for separate accounts and sub-advisory relationships. The firm seeks to generate returns for all of its clients via several different strategies, including:

  • Energy infrastructure master limited partnerships (MLPs) and other energy infrastructure companies
  • Private equity, high-growth, middle market midstream and upstream oil and gas companies
  • Private energy income investing in mature, long-life oil and gas assets
  • Private middle market credit
  • Liquid credit investing in high-yield bonds and bank loans, including collateralized loan obligations (CLOs)
  • Specialized real estate assets with a primary focus on medical office, senior living facilities, student housing and commercial debt collateralized by such assets
  • Structured, non-control investments in high-growth, lower middle market companies

Kayne Anderson Capital Advisors Investment Philosophy

The investment philosophy at Kayne Anderson Capital Advisors depends heavily on the specific fund in question. Firm-sponsored funds come in two broad categories: redeemable funds and lock-up funds. Redeemable funds allow investment and withdrawal at regular intervals (monthly, quarterly, etc.), while lock-up funds require up-front commitments and generally don’t allow for withdrawal before a stated term that usually last a few years.

For redeemable funds, the firm generally seeks to generate returns by investing in equity and debt instruments, such as high-yield bonds and bank loans. The firm may also use hedging strategies such as exchange-traded fund (ETF) shorts, options, MLP shorts, U.S. Treasury shorts, index ETFs and credit default swaps.

Lock-up funds at Kayne Anderson are mostly funds with a single strategy, focusing on investing in a specific type of company, like:

  • North American private oil and gas companies
  • Medical offices, senior living facilities, student housing units, self-storage buildings and more
  • Private middle market companies with more than $10 million in earnings before interest, taxes, depreciation and amortization (EBITDA)
  • Lower middle market, growth companies that offer technology solutions to specific industries

Fees Under Kayne Anderson Capital Advisors

As it's primarily a fund manager, Kayne Anderson Capital Advisors earns the majority of its compensation from charges it takes from the funds. The firm has separate fee schedules for its redeemable funds and lock-up funds. For separate account clients, the firm uses a similar fee arrangement to that of redeemable funds.

  • Redeemable funds: 0.50% - 1.50% annually
  • Lock-up funds: 1.00% - 2.00% annually

What to Watch Out For

For its redeemable funds, Kayne Anderson Capital Advisors usually adopts a performance-based fee structure. For this, the firm is compensated in accordance with the fund’s performance relative to a predetermined benchmark.

According the the firm's Form ADV, “Our redeemable fund fee arrangements may create an incentive to favor higher potential fee-paying accounts over other accounts in the allocation of investment opportunities. Similarly, KACALP or its affiliates or employees may have a significant proprietary investment in a fund or account, and KACALP may have an incentive to favor such fund or account to the detriment of other funds or accounts."

Despite the presence of these fees, keep in mind that Kayne Anderson is still a fiduciary, meaning it is legally obligated to always make decisions in the best interests of its clients, no matter what incentives may otherwise exist.

Disclosures

Kayne Anderson Capital Advisors has no disclosures listed on its Form ADV.

Opening an Account With Kayne Anderson Capital Advisors

If you’re interested in working with Kayne Anderson Capital Advisors, you can reach out in two different ways. You can call the firm’s office at (310) 284-5591, or you can send an email to investorrelations@KayneCapital.com.

Where Is Kayne Anderson Capital Advisors Located?

Kayne Anderson Capital Advisors is headquartered in Los Angeles on the corner of the Avenue of the Stars and Santa Monica Boulevard. In addition to its main location, the firm also has offices across the country, including in:

  • Boca Raton, FL
  • Chicago, IL
  • Houston, TX
  • New York, NY
  • Atlanta, GA
  • Dallas, TX
  • Denver, CO

Tips for Planning Your Retirement

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How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research