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KKR raises $305m through IPO of first listed closed-end fund

1 Aug 2013

stocks2_lrgPrivate equity giant KKR has completed the IPO of its first listed closed-end fund, KKR Income Opportunities Fund, by raising $305m.

The vehicle could raise another $47m if the underwriters take up their full over-allocation according to a statement from the firm.

KKR listed the fund on the New York Stock Exchange under the KIO ticker.

Firm co-founder and co-CEO George Roberts said, “Increasingly, individual investors are seeking exposure to strategies to diversify beyond traditional long only equity and bond funds.

“We believe that alternative investments represent an important aspect of all investors’ asset allocation as they can deliver attractive risk-adjusted returns.

“We’re pleased by investors’ reception of KKR’s first entry into the closed-end marketplace.”

KKR Asset management, which was launched in 2004, is acting as the fund’s investment advisor.

The investment process for the fund is substantially based on the investment process of KAM’s high yield, bank loans and special situations strategies.

KIO will primarily target first- and second-lien secured loans, unsecured loans and high yield corporate debt instruments.

Global private equity firm KKR looks set to close its North America Fund XI by the end of this year, anticipating a September final close of $8bn after two years on the road.

The vehicle will close far shy of its $17bn predecessor as market hesitation continues to dampen LP appetite for mega-funds.

Speaking at AltAssets’ LP-GP Forum: Mid-Market in May Bill Cornog, head of KKR Capstone Europe, said a September close was now likely after the firm extended fundraising to the second half of the year.

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