KKR, the pioneers of leveraged buyouts with more than $60bn under management will not go public this year as they had previously planned. This marks the clearest indication of how things are increasingly turning against the private equity industry. The company, a private equity firm said that it has postponed its flotation until 2009 after its Amsterdam- listed fund KKR Private Equity Investors (KPE) suffered losses. KKR had said in July that it would go public by acquiring 88 percent of KKR Private Equity Investors that it did not already own and by relisting 21 percent of the combined company’s shares on the New York Stock Exchange. The announcement was part of KPE’s third-quarter earnings call.
The third quarter earnings of KKR’s offshoot threw some light on how Kohlberg’s companies are performing, otherwise an undisclosed and secretively run fund- an assumed prerogative of the buyout firms. The fund, which invests in Kohlberg’s private equity funds as well as several companies owned by the firm, said its assets’ value fell 15.3 percent, to $3.87 billion, in the third quarter.
In a George R. Roberts, Co-Founder of KKR and Co-Chairman of KPE’s Managing Partner’s Board of Directors, commented, “As the decline in KPE’s quarterly NAV evidences, some of our investments faced reduced valuations during the third quarter as a result of the extraordinary turbulence in the global capital markets.”
However, KKR said that it remained committed to the move and will complete the transaction.