KKR to list fund on Euronext

Global buyout firm Kohlberg Kravis Roberts is planning to raise up to $1.5 billion from an IPO on Amsterdam’s Euronext Exchange.

New York-based private equity firm Kohlberg Kravis Roberts (KKR) is planning to raise up to $1.5 billion (€1.22 billion) in a flotation on Amsterdam’s Euronext Exchange.
 
KKR plans for the listed vehicle, KKR Private Equity Investor, to begin trading early next month after a parallel private placement in the US. The firm has begun marketing the new vehicle today, according to sources close to the firm.
 
KKR was not immediately available for comment.
 
A public listing would give KKR, which is currently raising a new global buyout fund of up to $15 billion, greater flexibility as investments underlying a publicly-listed vehicle would not be subject to the 10-year time horizon typical of closed-end private equity funds.
 
KKR Private Equity Investor would also provide the private equity firm with an ‘evergreen’ source of capital, meaning that proceeds from realised investments can be reinvested instead of being returned to shareholders.
 
The vehicle can effectively operate as a limited partner investing in KKR’s global funds, but can also co-invest alongside the firm on individual transactions.
 
This will not be the first time that KKR has made a foray into the public markets. In August 2004, the firm filed an application for a $750 million initial public offering of KKR BDC, a business development company aimed at making debt and equity investments in public companies. The effort was eventually abandoned due to investor resistance.
 
KKR has also listed two real estate investment trusts (REITs) on the New York Stock Exchange, through which it raised $780 million in a placing in August 2004 and $839 million in an offering in June 2005.
 
The public listing model is also one that other private equity firms have adopted in the past. Apollo Management, which recently joined the growing club of megafunds with a $10.1 billion close of its sixth limited partnership in January 2006, successfully achieved a $930 million listing for its BDC in April 2004.
 
Last March, New York-based private equity firm Ripplewood Holdings listed its $1.2 billion Japan-focused RHJ Industrial Partners fund on the Euronext Brussels stock exchange.
 
At the end of last month, Amboisse Investissement, a co-investment fund launched by Apax Partners France, raised gross proceeds of just over €114 million ($140 million) from an IPO on Euronext Paris which the firm said was approximately 1.5 times oversubscribed.