Kohlberg Kravis Roberts Takes a Roundabout Route To Go Public

啊，2007年夏天的令人愉快的日子：希拉里克林顿似乎有一个锁定总统的民主党提名，Bernie Madoff是一位受尊敬的货币经理，替代投资大镜头的嗡嗡声是关于公共和吸引吨的嗡嗡声所谓的永久资本。黑石集团先走了。许多人涌现为纽约私募股权公司首席执行官斯蒂芬施瓦茨曼，在6月份的黑石首次公开发布的Blackstone最初赢得了近7亿美元的现金支付。

不久之后，美国住房市场开始崩溃，其余的是历史 - 或者至少是持续的证词。许多对冲基金经理和私募股权的IPO梦想，包括Kohlberg Kravis Roberts＆Co.的校长的IPO梦想被经济危机的混响被摧毁。

But a dream deferred is not a dream denied. Although KKR principals have had to wait nearly three years to see their company’s shares listed on the New York Stock Exchange, they are finally set to arrive on the Big Board after a circuitous journey through Europe.

The New York–based firm, with $52.2 billion in assets as of December 31, first filed an S-1 with the Securities and Exchange Commission a mere two weeks after arch-rival Blackstone’s hugely successful IPO, which raised $4.13 billion. KKR, founded in 1976 by former Bear, Stearns & Co. partners Jerome Kohlberg Jr., Henry Kravis and George Roberts, hoped to raise at least $1.25 billion.

As market conditions rapidly deteriorated, KKR had to change tack. In mid-August 2008, barely a month before the collapse of Lehman Brothers Holdings sent markets worldwide into a tailspin, the buyout firm unveiled a new strategy: KKR would buy all of its Guernsey Island–based permanent-capital fund KKR Private Equity Investors, which trades on the Euronext Amsterdam exchange. At the time KPE shares were trading below net asset value.

Thus, says Michael Kim, an analyst with New York investment bank Sandler O’Neill + Partners, the transaction was a clever way for KKR “to kill two birds with one stone”: going public by joining with KPE and assuming its stock exchange listing, while simultaneously resolving the fund’s NAV-discount issue by absorbing it into the mother ship. KPE shareholders were offered a 21 percent stake in the combined entity, which would be called KKR & Co. (Guernsey).

交易完成后一年后——wrangling, KPE shareholders received a larger, 30 percent stake in KKR & Co. — then the merged entity was listed on the Euronext exchange while the company moved forward with plans to transfer the listing to the NYSE. In other words, it was a reverse IPO. For its part, the buyout firm got a timely booster shot of permanent capital: Teaming up with KPE added almost $10 billion to KKR’s asset base.

In February stockholders were notified that KKR was preparing to make the move to New York and that they would receive one Big Board share for each of their Euronext shares. (KKR will cease to trade on Euronext.) The company plans to list 204.9 million common shares, valued at $2.2 billion. The remaining 70 percent of the shares will be held by the principals. The timing of the listing has not been disclosed.

Transferring its listing to New York will bolster KKR’s access to public funds at a time when many investors are disenchanted with private equity. “You open the stock up to a much broader potential investor base,” notes Kim. It is perhaps no coincidence that KKR rival Apollo Global Management, a New York–based firm with $53.6 billion in assets, is also renewing efforts to list on the NYSE.

经过backing in to an NYSE listing, KKR avoids much of the uncertainty of launching an IPO in a market still hostile to its key business: large leveraged buyouts. But market timing isn’t the only kind of timing that matters with IPOs. Kravis and Roberts, KKR’s remaining co-founders and co-CEOs (Kohlberg left the firm in 1987), are both 66, and it’s a lot easier to cash in some of their stake if the company is publicly traded.