Private equity firm KKR & Co. LP, which is planning to go public this year, has posted a net investment loss of $1.1 billion in the first half of the year, 2008.The net loss for the first six months was $1.1 billion, compared with net income of $667.4 million a year earlier, the New York-based company in a regulatory filing. The company recorded investment profits of about $3.37 billion a year earlier amid a record boom in leveraged buyouts.
“The lack of credit has materially hindered the initiation of new, large-sized transactions for our private-equity segment and, together with declines in valuations of equity and debt securities, has adversely impacted our recent operating results,” New York-based KKR said in a filing day with the U.S. Securities and Exchange commission.
KKR will become publicly listed on the New York Stock Exchange through a takeover of the Amsterdam- listed buyout fund KKR Private Equity Investors, L.P., (KPE) which it created in May 2006. KKR Private Equity Investors LP has left investors who bought shares in its IPO with losses of almost 60 percent, the only fund to post a loss in KKR’s 32-year history.
In the first half of the year, the leveraged buyout giant had about 7% of its investments in the Asia Pacific region. During the period, KKR invested in Aricent, a technology outsourcing company and Bharti Infratel Limited, a subsidiary of Bharti Airtel Ltd in India.
During the quarters ended June 30, 2008 and June 30, 2007, management fees were $13.3 million and $12.3 million, respectively.
“If conditions further deteriorate, our business could be affected in different ways,” the private equity firm cautioned.
KKR had $60.7 billion in assets under management as of June 30, according to the filing.
Blackstone Group LP, the first big U.S. private equity firm to go public when it listed in June 2007, just before the credit crunch, has seen its earnings hit and its shares drop sharply from their $31 listing price. Blackstone reported a net loss of $408 million for the first half of the year.