KKR To Raise $500 Million For Troubled KKR Financial

Aug 20 2007 | 1:05pm ET

Private equity giant Kohlberg Kravis Roberts’ publicly-traded KKR Financial Holdings is heading to market after being battered by the downturn in asset-backed securities.

KKR Financial is set to sell $500 million in stock as it seeks to rid itself of its remaining residential mortgage-backed securities portfolio. The firm sold some $5.1 billion in such loans last week, taking a $40 million hit on the deal.

“We are shoring up the company for tougher times,” KKR Financial CEO Saturnino Fanlo said on a conference call. “The cost of obtaining protection is well-purchased insurance for these challenging times.”

San Francisco hedge fund Farallon Capital Management is to buy 16 million shares at $14.40 each—KFN shares were trading at a 52-week-low of $9.39 just last week, but were going for $15.60 in midday trading on Monday. Morgan Stanley is making a similar commitment. Between them, Farallon and Morgan Stanley will pay some $230 million for their shares. Also getting in on the action are Fir Tree Partners, JGE Capital Management, Marsico Capital Management, Oakhill Advisors and Sageview Capital, according to KKR Financial.

Other shareholders also have an opportunity to get in on the deal; their rights to buy new shares expire on Sept. 19. In addition, KKR has made a backstop commitment to buy as much as $100 million in KKR Financial shares if necessary.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...