Kohlberg Kravis Roberts is seeking to join the ranks of diversified private equity firms, like The Blackstone Group, that possess a securities broker-dealer license, according to a report in TheDeal.com.
Blackstone needs its broker-dealer license for its advisory business, which has prompted speculation by an industry executive that KKR might be mulling the creation of its own M&A advisory or restructuring advisory business. The source told TheDeal.com that broadening its business could bode well for the private equity firm, should it be planning an initial public offering like Blackstone’s recent NYSE-float.
Last week it was reported that KKR has retained Citigroup and Morgan Stanley to act as its advisors on a possible US offering. CNBC said the firm was considering something akin to Blackstone’s public offering, which constitutes roughly 12 percent of the firm’s management company.
Another reason KKR might be pursuing the broker-dealer license is to shore up its legal standing in deals with equity bridges, which involve private placement of securities, an industry insider told TheDeal.com.
KKR declined to comment.