The finish line is in sight for Emilia Sherifova, KKR's top tech exec who is spearheading the firm's multi-year migration to the public cloud.
The private-equity giant, which has some $496 billion in assets under management as of September 2022, expects to be all-in on the public cloud by the middle of the year, according to Sherifova, a KKR partner and the firm's chief information and innovation officer.
KKR is opting for a multi-cloud approach, wherein the firm's storage and compute needs straddle Amazon Web Services (where KKR hosts the majority of its workloads) and Microsoft Azure, she told Insider.
While cost-savings is a driver for many PE shops' move to the cloud, Sherifova is focused on using the tech to streamline KKR's back office with automation and analyze vast volumes of data on the cloud for M&A opportunities. In fact, KKR shouldn't see any cost changes, positive or negative, with its cloud play, Sherifova said.
KKR's cloud migration has been years in the making. Since at least 2017, the firm has been using some cloud services. But when Sherifova arrived at KKR in 2019, she accelerated the firm's move to the cloud and prioritized recruiting technologists to carry out the firm's ambitions.
Specifically, KKR has sourced engineers from outside Wall Street who had experience operating large, global computing environments, like those from Expedia, Amazon, and SeatGeek. Under Sherifova, KKR has more than doubled its number of cloud-focused engineers, she said, declining to specify numbers.
"The financial-services industry still has some ways to go when it comes to cloud fluency," Sherifova said.
As part of such recruitment efforts, Sherifova has led an internal crusade to transform the straight-laced private-equity giant into more of an innovation destination, informed from her own fintech startup roots.
Sherifova, who was hired in 2019, brings a unique background shaped by her years leading tech for a fintech startup to KKR's leadership table. The tech exec came to KKR after spending four years as CTO at Northwestern Mutual. Before that, she was the CTO at LearnVest, a personal-finance fintech.
Sherifova's hire was a move to "deliberately bring in a little bit of outside perspective, not coming specifically from the financial services industry, but from a digitally native background with startup experience," she told Insider.
Wall Street opens up to the cloud
KKR's embrace of the public cloud comes at a time when Wall Street at large, from banks to hedge funds and exchanges, has widely opened up to the tech. No longer are regulatory and security concerns barring finance players from moving mission-critical systems, like exchanges' matching engines and banks' core banking platforms, to the public cloud.
But PE shops, which have been hesitant to embrace data science, haven't been so quick to adopt the cloud compared to their peers across the Street. The industry has largely strayed away from internal capital-intensive tech overhauls commonly associated with public-cloud migrations. Investments in digital transformation have been mostly focused on portcos rather than the PE firms themselves.
That's started to change in the past year, as deals become more complex and PE firms lean into data to infer investment opportunities.
KKR eyes more automation, AI, and engineering talent
The cloud has opened up a vast realm of ready-to-use software tools allowing KKR to expand its tech footprint quickly. From deploying machine learning to analyze KKR's swaths of data to using optical character recognition to quickly analyze contracts, the cloud is transforming how the investment firm does business.
The firm is also using artificial intelligence to help its deal teams sift through data when researching potential investment opportunities and sectors, Sherifova said.
But such advancements didn't come easy.
KKR spent the past couple of years working through the design and engineering required to migrate all of its on-premise workloads. The firm leaned into the approach of using Infrastructure as Code, which is a way to automate the process of standing up new cloud environments.
Not only has the approach cut down manual processes required each time engineers develop or deploy an application in the cloud, but it ensures the underlying code and infrastructure components are consistent across the firm and its users.
Such an approach has allowed KKR to automate various processes, from automatically shutting off certain testing environments during down times, to streamlining business workflows associated with closing acquisitions. Streamlining the back office, especially in a workflow-heavy business like private equity, should pay dividends.
"Buying a house is a bit of a proxy," Sherifova said for the PE business. "Think about how much paperwork and how many workflows you have to deal with when you're closing on a house. Now imagine what you have to do when you're closing on a company; it's massive. So ensuring you are automating these workflows and capturing data throughout is critical to scaling our businesses."
Like other finance firms, KKR's move to the cloud is more than just an IT play — it's about setting up the firm to be tech-first.
Sherifova, who works out of KKR's Manhattan innovation hub, replete with whiteboards and breakout areas, is making it her mission to turn KKR into a tech powerhouse. A self-taught software developer, she tries to instill a culture of engineering, from encouraging a "fail fast" approach to ensuring front-office dealmakers are digitally savvy.
"KKR is known as a top private-equity brand. It may not have historically been known as a top engineering brand. Our ambition in the next 10 years is to not only be a world-class private-equity firm, but also a world-class engineering brand," she said.
KKR is a large shareholder in Axel Springer, which owns Insider.
