Private equity firm KKR swings to loss amid financial crisis

BLOOMBERG
Tuesday, Jun 02, 2009, Page 10

KKR & Co, Henry Kravis and George Roberts’ private equity firm, swung to a loss last year as leveraged buyouts dried up amid the credit crisis.

The New York-based firm had US$1.2 billion in losses compared with pretax economic net income of US$815 million the previous year, KKR said in a presentation to investors late on Sunday. The loss is the firm’s first in at least five years.

KKR, Blackstone Group LP and rival leveraged buyout firms have struggled to finance acquisitions in the past 18 months after the credit crisis shut off the debt financing they rely on to finance their takeovers.

A lack of credit for acquisitions by potential acquirers and scant appetite for initial public offerings are preventing LBO firms from selling their holdings.

KKR’s assets under management shrank by 11 percent to US$47.3 billion at the end of March, KKR said.

The firm is preparing to merge with its publicly traded European fund, KKR Private Equity Investors LP.
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2 June 2009 in Finance | tags: ,