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KKR (KKR)

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  • Apr. 23, 2014, 4:37 PM
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  • Apr. 23, 2014, 12:10 AM
  • Apr. 22, 2014, 5:35 PM
  • Apr. 22, 2014, 8:50 AM
    • Italy's two largest banks - Unicredit (UNCFF) and Intesa Sanpaolo (ISNPY) - agree to a deal with KKR and workout specialist Alvarez & Marsal to pool some of their bad loans in a special vehicle. The two lenders reportedly will each contribute €1B of loans and KKR will invest an undisclosed amount.
    • The hope is that combining the troubled debts with outside management expertise will make them more recoverable or easier to sell to 3rd parties.
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  • Apr. 22, 2014, 5:03 AM
    • UniCredit (UNCFF) and Intesa Sanpaolo (IITOF) are teaming up with KKR (KKR) and restructuring adviser Alvarez & Marsal to form a vehicle that could pool several billion euros of the Italian banks' bad loans, the FT reports.
    • Last month, UniCredit formed an internal "bad" bank to house €87B ($120B) of loans, two-thirds of which are impaired. Shortly after, Intesa but €46B of assets into a new bad bank. Both companies have taken massive losses on the loans.
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  • Apr. 21, 2014, 10:35 AM
    • CtW Investment Group - which advises union pension funds - is expected to oppose the deal, arguing the acquisition process was flawed, leading to too-low of a price.
    • The group's views may not mean a whole lot as its advises investors holding a little more than 0.1% of KFN's shares, and two more influential shareholder advisory groups - ISS and Glass Lewis - are supportive of the deal (though both raised concerns over conflicts of interest). Also, large shareholder Leon Cooperman (with more than a 7% stake) has given his blessing to the sale.
    • KFN owners will get 0.51 shares of KKR for each share of KFN they own.
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  • Apr. 14, 2014, 10:07 AM
    • In another case of private-equity firms making a deal with each other, Blackstone (BX) and the merchant banking arm of Goldman Sachs (GS) agree to buy Ipreo Holdings from KKR. Terms weren't disclosed, but DealBook reports a price of nearly $1B.
    • The rise in private transactions comes as P-E firms balk at the high prices for publicly traded targets.
    • KKR purchased Ipreo - which specializes in software for capital markets, including programs to help track equity and debt offerings - nearly three years ago from another P-E firm. Since then, Ipreo has boosted revenue by 50% and acquired to smaller firms.
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  • Apr. 10, 2014, 7:25 AM
    • Bruce Karpati is joining KKR as chief compliance officer, reports the NYT. Among Karpati's cases at the SEC was the charging of hedge funder Philip Falcone with market manipulation.
    • He left the agency last year, to become chief compliance officer of Prudential Financial's mutual fund unit.
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  • Apr. 9, 2014, 10:27 AM
    • Blackstone (BX +1.4%) is analyst Jason Weyeneth's favorite ahead of earnings season, even as his Q1 ENI estimate ot $0.54 per share is about $0.14 below consensus. Other buy-rated names are Apollo Global (APO) and KKR (KKR +1.1%).
    • The stock prices of each are off between 8-15% from their highs last month, with Weyeneth noting a number of factors - regulatory scrutiny, profit-taking, concerns volatility will keep a cap on realizations, overhang from a likely near-term APO offering, and technical pressure on KKR from the KFN deal - but nothing too concrete.
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  • Apr. 7, 2014, 10:08 AM
    • With the continent's banks pulling back, U.S.-based private-equity funds - KKR among them - are stepping up their lending to Europe's small and medium-sized companies. There were 56 such deals in 2013 Q4 up from less than 20 in the 2013's first quarter, and the P-E firms are on the hunt for more.
    • Unlike the U.S. - where there's been a healthy direct lending market for some time - the practice is relatively new in Europe, coming as banks there cope with strict new capital rules.
    • The P-E industry - thinking it could make easy money in Europe buying distressed loans amid the sovereign-debt crisis - went out and raised a ton of cash from investors. But when the ECB bailed out the banking system and fire-sales weren't forthcoming, the P-E firms found themselves with a lot uninvested cash and investors expecting double-digit returns. The next logical step: Skip the banks altogether and start pitching struggling European companies directly.
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  • Apr. 3, 2014, 10:54 AM
    • Acknowledging the Street is already way long the stocks, Bernstein nevertheless starts coverage of Apollo Global (APO), Blackstone (BX), and KKR with Outperform ratings, noting P/E multiples of 11x for alternatives is way below that of traditional asset managers at 16x (a fact also noted by Blackstone's Stephen Schwarzman).
    • At current valuations, says analyst Luke Montgomery, investors are paying only for cash flows from existing funds and get the going-concern value and any positives from yet-to-be-launched funds for free. "More important, they get a free option on the significant growth opportunities we see for these firms."
    • “Their advantage is extremely difficult to replicate, which means these firms have a large halo effect and are operating in a league of their own with little competition in their path. Meanwhile, the larger scale of these firms is generating outsized cash flow that is supporting a push into higher growth, less scale-constrained strategies, like credit and real estate."
    • Apollo is Montgomery's "Credit Growth Play," while Blackstone is "The Innovation as Cycle Muting Play," and KKR is "The Economies of Skill Play." If he had to pick from among the three, it would be KKR given valuation and its differentiated strategy.
    • Previously: Positive P-E sector coverage launched at Bernstein
    • Related ETFs: PSP, PEX
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  • Apr. 3, 2014, 7:43 AM
    • Bernstein helps itself to a portion of the hot private-equity sector, initiating coverage on Blackstone (BX), KKR, and Apollo Global (APO) all with Outperform ratings.
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  • Apr. 2, 2014, 8:00 AM
    • KKR, GS Capital Partners, and TPG Capital acquired Energy Future at the peak of the buyout boom in 2007 - more or less a bet, using $40.1B in debt, extrapolating the rise in natural gas prices into the future. At the time, it was the largest-ever LBO.
    • The three may end up accepting as little as 1% of the equity in the business as it completes its bankruptcy restructuring. The deal would also give full legal releases to the three P-E players, who a year ago had hoped to push a plan through giving them 15% of the company.
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  • Mar. 31, 2014, 7:11 AM
    • Siemens (SI) has received an order worth around €200M for 50 locomotives from European Locomotive Leasing, a new company backed by KKR (KKR) as part of an attempt to profit from the liberalization of rail traffic in Europe.
    • KKR will provide 30-40% of the financing for the order, with the rest to be covered by debt financing.
    • ELL will focus on freight and compete with the operators such as Railpool and Mitsui-backed MRCE. (PR)
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  • Mar. 27, 2014, 9:01 AM
    • Babcock International (BCKIY) has agreed to acquire helicopter transport services firm Avincis from World Helicopters for £920M ($1.5B) plus £705M in debt.
    • The British defense support and engineering services group intends to fund the deal with a £1.1B rights issue.
    • "This is a Babcock-type business with big complicated customers, where services are absolutely critical," CEO Peter Rogers tells Reuters. "It's technical, the engineering is pretty sophisticated and it takes us into markets outside the U.K. which are very valuable to us, potentially over the next few years."
    • World Helicopters is owned by investment funds affiliated with KKR (KKR) and Italian private-equity firm Investindustrial.
    • KKR believes the deal will give it a money market multiple of almost 2.5 times its original investment, which it made in 2010, Reuters reports. (PR)
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  • Mar. 26, 2014, 7:57 AM
    • Having had it "up to here" with its low valuation, Carlyle (CG) group is in the market to buy a traditional asset manager - not with its investment funds - but with its own money, reports Reuters. Carlyle trades at 10.3x expected earnings, a steep discount to traditional players in the 14x-18x area - this despite faster earnings growth, faster AUM growth, and generating more earnings for dollar of assets at the P-E firm.
    • Carlyle isn't the only one frustrated - Blackstone's (BX) Stephen Schwarzman has expressed the exact same sentiments. KKR and Apollo Global (APO) also trade between 9x-11x earnings. One reason for the gap is the reliance of P-E firms on performance fees as opposed to the predictable income streams of the traditional players.
    • Carlyle did buy TCW in 2012, but that was through a buyout fund, and it has bid for Russell Investments, but again also through a buyout fund.
    | 2 Comments
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Company Description
KKR & Co LP offers a broad range of asset management services to its investors and provides capital markets services to its firm, its portfolio companies and its clients.
Sector: Financial
Country: United States