Guernsey, Channel Islands, United Kingdom
KKR Private Equity Investors, L.P. (Amsterdam:KPE), a Guernsey limited partnership that invests its assets primarily in private equity investments sponsored by Kohlberg Kravis Roberts & Co. L.P. ("KKR"), has reported its financial results for the quarterly period ended September 30, 2006. KPE commenced operations on May 10, 2006 with $4,830.1 million of investable capital, which has grown to $4,959.4 million in net asset value ("NAV") as of September 30, 2006.
KPE invests its capital as the sole limited partner of KKR PEI Investments, L.P. (the "Investment Partnership"). As of November 10, 2006, investments and investment commitments totaled $3.6 billion, excluding temporary investments.
Henry R. Kravis, Co-Founder of KKR and Co-Chairman of KPE's Managing General Partner's Board of Directors, commented, "Since our initial offering six months ago, we are pleased with both the pace and quality of the investments we have made and have committed to make. We continue to see many large and attractive investment opportunities on a global basis."
Results of Operations
As of September 30, 2006, KPE's NAV per unit was $24.25 compared to $23.77 at June 30, 2006 and $23.61 immediately subsequent to the initial offering of KPE's common units and related transactions. On an annualized basis, KPE's total return for the quarter period ended September 30, 2006 was 8.0 percent and for the period from the date of commencement of operations, on May 10, 2006, to September 30, 2006 was 6.9 percent.
The Investment Partnership reported an increase in net assets resulting from operations of $100.6 million and $132.1 million during the quarter and year-to-date periods ended September 30, 2006, respectively, due to interest income on cash management activities and unrealized appreciation on investments, primarily related to opportunistic investments.
Investments
As of September 30, 2006, the Investment Partnership held $3.6 billion of temporary investments and the portfolio of the Investment Partnership consisted of investments totaling $1.3 billion, as follows:
-- Co-investments of $585.0 million in portfolio companies of KKR-sponsored private equity funds,
as follows:
-- a $250.0 million co-investment in NXP B.V., the semiconductors business formerly of Royal
Philips Electronics;
-- a $200.0 million co-investment in VNU Group B.V., a global information and media company; and
-- a $135.0 million co-investment in Capmark Financial Group Inc., a leading commercial real
estate finance company.
-- Investments of $499.3 million in KKR-sponsored private equity funds:
-- $281.1 million in KKR European Fund, Limited Partnership;
-- $155.3 million in KKR Millennium Fund L.P.;
-- $35.2 million in KKR European Fund II,Limited Partnership; and
-- $27.7 million in KKR 2006 Fund L.P.
-- Opportunistic investments of $235.4 million in publicly traded securities.
Subsequent to September 30, 2006 and through November 10, 2006, the Investment Partnership made additional investments, which totaled $121.8 million, consisting of the following:
-- An investment of $58.3 million in KKR Strategic Capital Institutional Fund, Ltd., a KKR-sponsored opportunistic credit fund principally investing in debt securities alongside funds managed by investment professionals affiliated with KKR Financial LLC, with further commitments of $116.7 million expected to be funded in early 2007.
-- Opportunistic investments of $48.2 million in a publicly traded security.
-- Capital contributions of $15.3 million with respect to limited partner interests in KKR-sponsored private equity funds related to an investment in PagesJaunes, the leading publisher of directories in France and the leading online directory portal in Europe.
As of November 10, 2006, the Investment Partnership was committed to another $2.4 billion of investments, as follows:
-- Co-investments of $250.0 million, as well as related capital contributions of approximately
$100.0 million to certain KKR-sponsored private equity funds, with respect to the following companies:
-- HCA, Inc., a leading health care services company, which has signed a definitive merger
agreement with an investor group that includes KKR;
-- Tarkett SA, the France-based floormaker, in respect of which KKR acquired 50% of its
controlling majority stockholder, Societed'Investissement Familiale SA; and
-- KION Group, the forklift business of Linde AG, which has signed a definitive agreement with
an investor group that includes KKR.
-- Capital commitments of $2.0 billion primarily related to a limited partner interest in KKR
2006 Fund L.P. to which subscription documents have been submitted.
Whether these commitments will be consummated depends on the satisfaction or waiver of a number of conditions, some or all of which may not be in the control of KPE, the Investment Partnership or KKR. No assurances can be made as to whether or when, or the actual amounts at which, these commitments will be consummated.
In addition, during October 2006, the Investment Partnership sold an opportunistic position in a publicly traded security resulting in net proceeds of $227.7 million, including a gain on foreign currency transactions, against an original cost of $194.4 million, which produced an annualized net internal rate of return of 93.7 percent.
The aggregate amount of the Investment Partnership's investments or investment commitments, excluding temporary investments, totaled $3.6 billion as of November 10, 2006.
KPE has posted its unaudited financial statements and the unaudited consolidated financial statements of the Investment Partnership, as well as an interim operating and financial review, to its website (www.kkrpei.com). KPE encourages investors to carefully read these documents in conjunction with this news release.
Distribution
On November 15, 2006, the Board of Directors of KPE's general partner declared a distribution of $0.19 per unit payable on or about December 15, 2006 to unitholders of record immediately prior to the opening of business in Amsterdam on December 1, 2006. Because the distribution was declared subsequent to September 30, 2006, the aggregate distribution payable of $38.9 million is not reflected in KPE's net asset value as of September 30, 2006.
Information for Investors -- Teleconference and Webcast
KPE will discuss its financial results on a teleconference to be broadcast live on the Internet on Thursday, November 16, 2006 at 6 p.m. CET (Amsterdam)/ 5 p.m. GMT (Guernsey/London) / 12 noon EST (New York City). A webcast (listen only) of the teleconference can be accessed via the Investor Relations section of KPE's website at www.kkrpei.com.
About KPE
KKR Private Equity Investors, L.P. is a Guernsey limited partnership that seeks to create long-term value primarily by participating in private equity investments sponsored by KKR. Formed in April 2006 to provide complementary capital for KKR-sponsored private equity funds, KPE enables certain public market investors to invest in KKR-sponsored investments. KPE plans to invest at least 75% of its assets in KKR-sponsored private equity investments. Up to 25% of KPE's assets may be committed to opportunistic and other investments identified by KKR that are outside the scope of KKR's traditional private equity investments. KPE makes its investments through another Guernsey limited partnership, KKR PEI Investments, L.P., as its sole limited partner.
The common units and related restricted depositary units of KPE are subject to a number of ownership and transfer restrictions. Information concerning these ownership and transfer restrictions is included in the Investor Relations section of KPE's website at www.kkrpei.com.
Forward-Looking Statements
This release may contain certain forward-looking statements with respect to the financial condition, results of operations, liquidity, investments, business and prospects of KPE. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.
KKR PRIVATE EQUITY INVESTORS, L.P.
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
(Amounts in thousands, except unit and per unit amounts)
----------------------------------------------------------------------
September
30, 2006
----------
ASSETS:
Investments in limited partner interests, at fair value:
KKR PEI Investments, L.P. - Class A (cost of $3,748,824) $3,876,344
KKR PEI Investments, L.P. - Class B (cost of $586,106) 583,767
KKR PEI Investments, L.P. - Class C (cost of $491,638) 498,258
KKR PEI Investments, L.P. - Class D (cost of $0) --
----------
4,958,369
Cash and cash equivalents 3,059
Interest receivable 18
Prepaid expenses 203
----------
Total assets 4,961,649
----------
LIABILITIES:
Due to affiliate 427
Accrued liabilities 1,804
----------
Total liabilities 2,231
----------
NET ASSETS $4,959,418
==========
NET ASSETS CONSIST OF:
Partners' capital contributions (204,550,001 common units
outstanding) $5,113,750
Offering costs (283,677)
Net increase in net assets resulting from operations 129,345
----------
$4,959,418
==========
Net asset value per common unit $ 24.25
==========
Market price at September 30, 2006 $ 21.25
==========
KKR PRIVATE EQUITY INVESTORS, L.P.
STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in thousands)
----------------------------------------------------------------------
Quarter From April
Ended 18, 2006
September (Date of
30, 2006 Formation)
to
September
30, 2006
--------------------- NET INVESTMENT INCOME
ALLOCATED FROM KKR PEI INVESTMENTS, L.P.:
Interest income $ 57,894 $ 92,798
Expenses 5,114 5,359
--------- -----------
52,780 87,439
INVESTMENT INCOME -- Interest income 75 180
EXPENSES -- General and administrative expenses 2,156 2,636
--------- -----------
NET INVESTMENT INCOME 50,699 84,983
--------- -----------
UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS ALLOCATED FROM KKR PEI INVESTMENTS, L.P.
-- Net change in unrealized appreciation (depreciation) on limited partner interests:
KKR PEI Investments, L.P. - Class A 40,081 40,081
KKR PEI Investments, L.P. - Class B (23) (2,339)
KKR PEI Investments, L.P. - Class C 7,592 6,620
--------- -----------
Net unrealized gain on investments 47,650 44,362
--------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 98,349 $ 129,345
========= ===========
KKR PEI INVESTMENTS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
(Amounts in thousands)
----------------------------------------------------------------------
September 30, 2006
------------------
ASSETS:
Investments, at fair value:
Opportunistic investments -- Class A (cost of
$194,996) $ 235,395
Co-investments in portfolio companies of private
equity funds -- Class B (cost of $587,321) 585,000
Private equity funds -- Class C (cost of $492,658) 499,291
------------------
1,319,686
Cash and cash equivalents 2,632,230
Deposit 1,000,000
Interest receivable 20,213
Unrealized gain on foreign currency exchange
contracts, net 738
------------------
Total assets 4,972,867
------------------
LIABILITIES:
Due to affiliate 3,258
Accrued liabilities 956
------------------
Total liabilities 4,214
------------------
NET ASSETS $ 4,968,653
==================
NET ASSETS CONSIST OF:
Partners' capital contributions $ 4,836,568
Net increase in net assets resulting from
operations 132,085
------------------
$ 4,968,653
==================
KKR PEI INVESTMENTS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in thousands)
----------------------------------------------------------------------
Quarter From April
Ended 18, 2006
September (Date of
30, 2006 Formation)
to
September
30, 2006
---------------------
INVESTMENT INCOME -- Interest income $ 58,015 $ 92,991
--------- -----------
EXPENSES:
Management fees 4,274 4,395
General and administrative expenses 841 965
--------- -----------
Total expenses 5,115 5,360
--------- -----------
NET INVESTMENT INCOME 52,900 87,631
--------- -----------
REALIZED AND UNREALIZED GAINS FROM INVESTMENTS AND FOREIGN
CURRENCY:
Net realized loss (995) (995)
Net change in unrealized appreciation 48,744 45,449
--------- -----------
Net gain on investments and foreign currency
transactions 47,749 44,454
--------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 100,649 $ 132,085
========= ===========
CONTACT: Investor Contact: Integrated Corporate Relations Andrew Greenebaum +1-310-954-1100 or Media Contacts: In the U.S: Kekst and Company Mark Semer +1-212-521-4800 or In Europe: Finsbury Simon Moyse +44-207-251-3801
CONTACT: Investor Contact: Integrated Corporate Relations Andrew Greenebaum +1-310-954-1100 or Media Contacts: In the U.S: Kekst and Company Mark Semer +1-212-521-4800 or In Europe: Finsbury Simon Moyse +44-207-251-3801 , ,
Source: Business Wire (Business Wire India)