KKR To Launch Two Mutual Funds

Jul 20 2012 | 2:15am ET

Private equity giant Kohlberg Kravis Roberts is going retail, in the form of a pair of mutual funds.

New York-based KKR said it would launch a pair of distressed funds targeted at individual investors. One will be a closed-end vehicle investing in both stocks and bonds, while the other will give retail investors a taste of one of KKR's specialties: high-yield debt.

The former, the KKR Alternative Corporate Opportunities Fund aims to profit from the European debt crisis and other distressed situations. The latter, the KKR Alternative High Yield Fund, will put at least 80% of its money in high-yield debt, primarily in the U.S., KKR said in regulatory filings.

KKR did not say what the funds' minimum investment requirements would be, nor the management fees it plans to charge. But it did say that it expected to make quarterly distributions and would have quarterly repurchase offers for the closed-end Alternative Corporate fund. Neither will be listed on an exchange.

In offering its first mutual funds, KKR follows in the footsteps of competitor the Blackstone Group, which offers two publicly-listed closed-end mutual funds. Apollo Global Management also has a listed closed-end fund.

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