KKR & Co. agreed to combine its Prisma hedge-fund unit with Pacific Alternative Asset Management Co. to create one of the world’s largest investors in hedge funds. KKR will have a 40 percent stake in Paamco Prisma Holdings, which will manage about $34 billion, according to a statement Monday from the companies. KKR Prisma manages about $10 billion and Irvine, California-based Paamco oversees $24 billion. “We are bringing together two leading names to create an even stronger liquid alternatives firm,” Henry Kravis and George Roberts, New York-based KKR’s billionaire co-founders, said in the statement. Paamco and Prisma are firms that...