Kohlberg Kravis Roberts & Co. is looking to be one of the first big-name buyout firms to go public the old-fashioned way, as the New York-based firm is planning an IPO on Amsterdam’s Euronext stock exchange that could raise as much as $1.5 billion.
It’s expected to begin trading early this month.
This is not the first dalliance into the public realm for the group. KKR tried its hand in 2004 when the firm and many of its buyout peers filed to go public as a business development company (BDC), but many of the firms abandoned their efforts amid lackluster investor sentiment.
A spokesman for KKR declined comment for this story.
KKR is by no means the first buyout shop to seek a public listing, but it would probably be the most notable at this point. A year ago, Ripplewood Holdings floated RHJ International on the Euronext stock exchange in Brussels. Ripplewood’s floatation, however, differs from the KKR offering in that its IPO gave new shareholders an interest in companies the firm already controlled, such as Columbia Music Entertainment, Asahi Tec Corp. and Shaklee Global Group.
Other private equity shops with public listings include Canada’s Onex Corp. and 3i Group, based in London, as well as other BDCs, such as American Capital Strategies, Gladstone Capital and Allied Capital. Also, in March, Swiss fund-of-funds manager Partners Group went public in a $1.7 billion IPO.
The lure to launching a public vehicle is that it makes raising capital easier than the typical fund-raising exercise of hitting up LPs. A public offering also gives liquidity to the KKR partners.
While the floatation won’t offer a chance to realize portfolio liquidity as in the case of Ripplewood, it does give the firm a chance to cash in on the value of its brand.
There is also the belief that operating through a public company allows for more flexibility in terms of holding onto portfolio companies. Public entities, without the pressure of a fund cycle, can employ a long-term strategy.
KKR’s offering is seen as a precursor to a rush of buyout groups going public. Speculation has been percolating that other brand names in the business, such as The Carlyle Group and Blackstone Group, could join KKR and seek a public listing.