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KKR PEI writes down $251.8m

The global buyout firm’s listed fund’s net asset value declined, but its share price remained steady narrowing its substantial trading discount.

KKR Private Equity Investors, the global buyout firm’s Euronext-Amsterdam listed fund, had net unrealised depreciation of assets of $251.8 million, in the quarter to March 31 2008.

Henry Kravis:
trust declines

It made net realised gain on investments of $4 million.

The fund’s NAV declined 5.4 percent to $23.02 (€15) per unit, or just under $4.72 billion during the period. This corresponded to overall declines of 9.9 percent in the S&P 500 Index.

In its previous quarterly results the trust also wrote down several investments. Like its peers, it is introducing fair value accounting in volatile markets. 

Despite the write-downs and the related NAV falls, the vehicle was trading up 0.34 percent at $14.85 at 1736CET. The LP’s discount to NAV narrowed to 35.4 percent, having grown to more than 50 percent at its low trading price of $11.45 per share this year.

Several of the fund’s investments were affected:

PagesJaunes Groupe, a French directories business which KKR bought for €3.4 billion ($5.2 billion) in 2006, fell by $126.9 million due to changes in the group’s market quotation.

Its Sun Microsystems investment, part of the firm’s $700 million convertible bonds bought last year in the technology company, dropped by $45.1 million.

The LP’s investment in Orient Corporation, the Japanese consumer lender in which KKR joined a Mizuho-led Y290bn ($2.5bn) to take convertible preferred stock last year, fell by $35.7 million.

Its Legrand Holdings stake, an investment in the listed French electrical goods company, dropped by $35.3 million due to related falls in its listed price.

The LP’s Capmark Financial Group investment fell by $15 million, or falling from 1.3 times to 1.2 times cost. Capmark was acquired in 2006 for $16.8 billion in conjunction with Five Mile Capital Partners and Goldman Sachs Capital Partners.

It wrote up its investment in The Nielsen Company, a media company, by $21.4 million to $220 million. Nielsen, formerly called VNU, was bought by KKR in 2006 for $9.6 billion. This was a change of 1.0 times cost to 1.1 times cost.