KKR is suffering a "black eye" over its investment in headed-for-bankruptcy Energy Future Holdings, but - says Oppenheimer's Chris Kotowski - other investments in that 2006 flagship fund are doing fine and should lead to further gains.
Among them are Capsugel, Biomet, and Go Daddy. Then there's "works in progress" like First Data and Samson where marks have already been taken, but KKR - traditionally conservative in its marks - is working to improve the situation. Kotowski thinks if the fund were liquidated at current prices, it would generate $0.89 in earnings per share.
"The news is not always good, but KKR seems to take the bitter medicine early when it needs to," says Kotowski ... [We] think KKR is the best organic growth story in the [P-E] group because it has used its balance sheet investments to fund numerous first generation funds in Energy, Infrastructure, Real Estate, Credit and long/short equities."