July 20, 2009

Kohlberg Kravis to merge with Euro partner

Kohlberg Kravis Roberts & Co. plans to merge with its European affiliate, giving it a Euronext Amsterdam listing, the U.S. private equity firm said Monday.

The directors of the European affiliate, KKR Private Equity Investors LP, also known as KPE, approved the proposal, Kohlberg Kravis said in a statement.

The proposed combination must still receive approval from KPE shareholders, 44 percent of which already said they'd support the deal. KPE is a publicly traded private equity fund.

KKR said it hoped to close the transaction Oct. 1.

KKR also said it believed its assets under management as of June 30 were about $50.8 billion, up from $47.3 billion as of March 31.

It didn't say where the extra capital came from, but KKR is in the market with funds targeting infrastructure and mezzanine debt investments, The Wall Street Journal reported.

A typical mezzanine investment consists of a debt or debt-like instrument. But because those receiving the capital investment are compelled to make interest payments, the investment typically generates significant current income for investors.