Listed KKR fund has $1.6bn in deals

KKR Private Equity Investors, which raised $4.8bn in May, has committed $1.6bn to recent KKR deals and $1.9bn to the firm’s 2006 Fund.

KKR Private Equity Investors, the publicly-listed fund US private equity firm Kohlberg Kravis Roberts floated on Amsterdam Euronext in May, has released its first set of results, revealing that the partnership has so far committed $3.5 billion (€2.7 billion) of the $4.8 billion raised.

The results will be welcomed by investors in the publicly-listed fund who will want to see cash deployed as quickly as possible, although returns from such investments are still some way off.

KKR Private Equity Investors, which trades under the ticker symbol KPE, debuted on the Euronext Amsterdam exchange on 3 May at $24.80 after raising nearly $5 billion in a Guernsey-based private placement. By mid-June, the shares were trading far lower at $22.39, but have since picked up. The shares began trading today at $22.90 before slipping slightly to $22.79 at 2pm BST.
The $3.5 billion figure includes a $1.9 billion commitment to KKR 2006 Fund, which is currently being raised and targeting around $15.5 billion in total.
The remaining $1.6 billion includes a $135 million co-investment in Capmark Financial Group, a real estate finance company acquired by KKR earlier this year, and a $200 million co-investment in VNU, the Dutch media and marketing business acquired for €8.7 billion by a consortium including KKR in May.
KKR Private Equity Investments is also investing alongside KKR in its recent acquisitions of HCA, a healthcare services company bought by a consortium including Bain Capital and Merrill Lynch for $33 billion; PagesJaunes, a yellow pages business, in which KKR took a 54 percent stake for €3.4 billion; and the semiconductors business of Royal Phillips Electronics for €8.3 billion, in which the firm bought a 80.1 percent stake.
A note published today by Cazenove said that KKR Private Equity Investment’s $1.6 billion of investments, not including the $1.9 billion commitment to KKR 2006 Fund, represent 33.5 percent of assets. Cazenove said: “This is an impressive result and gets the fund off to a better start than we would have expected but there still remains $3.2 billion in cash (returning around 4.6 percent per annum) so we would expect NAV returns to lag the peer group. As a result we retain our underperform recommendation.”
Apollo Management, another US buyout firm, raised $2 billion for AP Alternative Assets on the Euronext Exchange earlier in August. The publicly-quoted private equity fund raised around a third more than expected with shares listing on 8 August at $20.
Other private equity firms reported to be interested in raising publicly-listed funds include Texas Pacific Group, EQT and CVC Capital Partners.