Private equity firm KKR & Co. L.P. completed its IPO (for more information, go to our 7/15/10 post) and its final IPO prospectus was filed with the. This prospectus is not an offer to sell these securities and it the ability to complete an initial public offering of the portfolio company in which. The IPO profiles may contain historical records. Led by Henry Kravis and George Roberts, KKR is a global alternative asset manager with $ billion in AUM.
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When making fair value determinations, we typically use a market multiples approach that considers a specified financial measure such as EBITDA or a discounted cash flow or liquidation analysis. The information on our website is not part of this prospectus or the registration statement of which this prospectus forms a part and is not being incorporated by reference into either such document.
Our partners’ capital could be adversely affected if the values of investments that we record are materially higher than the values that are ultimately realized upon the disposal of the investments and changes in prospedtus attributed to investments from quarter to quarter may result in volatility in our assets proslectus management and such changes could materially affect the results iipo operations that we report from period to period. There are no readily ascertainable market prices for a substantial majority of illiquid investments of our funds.
We believe that competition for investment opportunities is based primarily on the pricing, terms and structure of a proposed investment and certainty of execution. As a public company, we will be subject to the reporting requirements of the Securities Exchange Act ofor the Exchange Act, and requirements of the Sarbanes-Oxley Act ofor the Sarbanes-Oxley Act.
Our business often requires that we deal with confidential matters of great significance to companies in which we may invest. Hence, we prospecuts our unitholders will only have recourse and proospectus able to seek remedies against our Managing Partner if our.
The time and attention that our principals and other employees devote to assets that are not being contributed to the Group Partnerships will not financially benefit us and may reduce the time and attention these individuals devote to our business.
The following diagram illustrates, in summary format, the ownership and organizational structure that we will have upon the completion of this offering. Also, during periods of financial distress or following an insolvency, the ability of our funds to influence a company’s kk and to take actions to protect their investments may be substantially less than that of the senior creditors.
Accordingly, under certain conditions, our funds may be forced to either sell securities at lower prices than they had expected to realize or defer sales that they had planned to make, potentially for a considerable period of time.
Our asset management activities have benefited from high levels of investments in alternative asset classes in recent years. The Exchange Act will require that we file annual, quarterly and current reports with respect to our business and financial condition. As a result, the risk of loss associated with a leveraged company is generally greater than for companies with comparatively less debt.
Even if the securities are publicly traded, large holdings of securities can often be disposed of only over a substantial length of time, exposing our investment returns to risks of downward movement in market prices during the intended disposition period. The KKR Group is considered our predecessor for accounting purposes and its combined financial statements will be our historical financial statements following the Reorganization Transactions ptospectus this offering.
Changes to the U. The Group Partnership units held by KKR Holdings will be subject to applicable transfer restrictions, and will not be exchangeable for our common units before. Moreover, we prospectuss experience losses on our investments of our own capital as a result of poor performance by the investments we manage. We intend to maintain this long-term focus after we become a public company even though this may lead to increased volatility in our ippo from period to period.
KKR is expanding its debt finance capabilities, but that group is expected to be small, sources say. There ippo a risk that our employees could engage in misconduct that adversely affects our business. Separately, members of the U.
To the extent that any assets remain, holders of claims that rank equally with our investment would be entitled to share on an equal and ratable basis in distributions that are made out of those assets. Moreover, transfer restrictions to which interests in KKR Holdings are subject in certain instances lapse over time, may not be enforceable in all cases and can be waived.
The due diligence process may at times proepectus subjective with respect to newly organized companies for which only limited information is available. We rely heavily on our financial, accounting and rpospectus data processing systems. We also earn investment income from investing our own capital alongside fund investors and from our carried interest in fund investments, which provides us with a disproportionate share of the funds’ investment gains.
We may experience higher than anticipated operating expenses as well as higher independent auditor and consulting fees during the implementation of these changes and thereafter. Our investment professionals meet regularly with major investment banking firms concerning potential investment opportunities, and we jpo work with the same group of financial institutions when seeking financing arrangements for our transactions. As a result, those individuals will receive financial benefits from our business in the form of distributions and payments received from KKR Holdings and the appreciation in the value of the Group Partnership units that KKR Holdings owns.
Our funds may be affected by reduced opportunities to exit and realize value from their investments and by the fact that we may not be able to find suitable investments for the funds to effectively deploy capital, which could adversely affect our ability to raise new funds. In the past, changing economic and financial conditions have led to variations in the level of our investment activities during any particular time period.
In addition, immediately following this offering, our principals will generally have sufficient voting power to determine the outcome of any matters that may orospectus submitted for a vote of our unitholders. An investment in our common units involves risks. We do not intend to permit the short-term perspectives of some public market investors to influence our investment, operational or strategic decisions, our duties or commitments to our fund investors or our focus on creating long-term value for our unitholders.
We pioneered the development of the leveraged buyout and have worked throughout our history on creating innovative financing structures that allow us to compete aggressively for transactions while maintaining ongoing financial flexibility. The above modifications of fiduciary duties are expressly permitted by Delaware law.
Congress have introduced legislation that would, if enacted, treat income received for performing investment management services as ordinary income received for the performance of services, which would also preclude us from qualifying for treatment as a partnership for U.
We intend to adhere to the disciplined investment approach that we have developed over our year history, focusing in particular on driving value creation from the time an investment is made.
Will it ultimately become a one-stop shop, handling equity and debt for its leveraged buyouts and shutting banks out of the process entirely? Our other employees are expected to receive equity grants at the time of this offering, which we believe will similarly align their interests. The following table presents information concerning the total distributions made by our traditional private equity funds during the periods indicated.
We will also incur costs that we have not previously incurred for director fees, investor relations expenses, expenses for compliance with the Sarbanes-Oxley Act and rules of the SEC and the New York Stock Exchange, and various other costs relating to being a prospfctus company.