Private equity giant KKR & Co. (NYSE: KFN) posted a $1.2 billion loss last year -- compared to pretax net income of $815 million the year before. This is KKR's first loss in at least five years.
Bloomberg pins the blame on a drop-off in leveraged buyout transactions. A $1.4 trillion market in 2006 and 2007, only $212 billion was spent on takeovers last year, which was bound to put a dent in KKR's top and bottom lines.
The company's assets under management fell by 11% to $47.3 billion by the end of the first quarter of 2009, but the company claims to have $15.3 billion in investable cash on hand. Currently, KKR values half of its top 10 investments -- including Energy Future Holdings Inc. and Alliance Boots Ltd. -- at less than what it paid for them.
It's been a tough reporting season for other leveraged buyout companies, as well. Blackstone Group LP (NYSE: BX)has been constrained by a lack of credit for acquisitions and the slim initial public offering (IPO) market -- both market entry and exit are limited, as a result. This led to a $1.3 billion loss last year.
Entrepreneur's Journal: Putting together a solid sales contract
The week in preview: Earnings from Walmart, Macy's, and other retailers
Six top trades for the rest of 2009
Reader Comments (Page 1 of 1)
8-29-2009 @ 10:28PM
GeorgeSD said...
Well maybe greedmeister Schwarzworm will have to cut back his development on LI....pity.