Guernsey, Channel Islands, United States
KKR Private Equity Investors, L.P. (Euronext Amsterdam: KPE), a Guernsey limited partnership that invests its assets in private equity and opportunistic investments identified by Kohlberg Kravis Roberts & Co. ("KKR"), reported on Wednesday its financial results for the initial annual period ended December 31, 2006. KPE commenced operations on May 10, 2006 with $4,830.1 million of investable capital, which has grown to $5,035.6 million in net asset value ("NAV") as of December 31, 2006.
KPE invests its capital as the sole limited partner of KKR PEI Investments, L.P. (the "Investment Partnership"). As of March 23, 2007, the Investment Partnership's investments and pending fundings into announced transactions totaled $4.3 billion, excluding temporary investments. The $4.3 billion of actual and pending investments was comprised of $1.9 billion of investments at December 31, 2006 at fair value, $1.2 billion of subsequent investment activity on a cost basis and $1.2 billion of identified transactions as of March 23, 2006. In addition, the remaining undrawn commitments to investment funds totaled $1.4 billion as of March 23, 2006.
Henry R. Kravis, Co-Founder of KKR and Co-Chairman of KPE's Managing General Partner's Board of Directors, commented, "In just over ten months of operations, we have been able to identify and deploy over 90% of KPE's capital in a variety of investments. Recently, the pace of these investments has accelerated as our unique sourcing model has allowed us to identify a variety of large and attractive situations."
George R. Roberts, Co-Founder of KKR and Co-Chairman of KPE's Managing General Partner's Board of Directors, added, "Our deep industry knowledge and global approach allows us to selectively capitalize on the range of opportunities available at the high-end of the private equity market. We remain confident that KKR's disciplined global approach will continue to result in a sustainable competitive advantage."
Results of Operations
As of December 31, 2006, KPE's net asset value per unit was $24.81, adjusted for the $0.19 distribution paid on December 15, 2006, compared to $23.61 on May 10, 2006, on a pro-forma basis, as if the over-allotment option was exercised on such date. The NAV per unit at December 31, 2006 net of the $0.19 distribution was $24.62. On an annualized basis, KPE's total return for the quarter ended December 31, 2006 was 9.2 percent and for the period from the date of commencement of operations, on May 10, 2006, to December 31, 2006 was 7.8 percent.
Operating results of KPE for the partial year ended December 31, 2006, were highlighted as follows:
-- Net investment income was $126.5 million, which primarily represented interest income from cash management activities;
-- Net realized gain on investments and foreign currency transactions was $34.5 million and resulted primarily from the sale of opportunistic investments;
-- Net unrealized gain on investments and foreign currency transactions was $83.3 million primarily due to net appreciation in the value of portfolio companies of KKR's private equity funds; and
-- The resulting net increase in net assets resulting from operations was $244.4 million.
Investments
As of December 31, 2006, the Investment Partnership held $3.1 billion of temporary investments and the portfolio of the Investment Partnership consisted of investments, valued at fair value, totaling $1,901.8 million as follows:
-- Investments of $701.8 million through KKR's private equity funds:
-- $326.9 million in KKR European Fund, Limited Partnership,
-- $178.2 million in KKR Millennium Fund L.P.,
-- $139.6 million in KKR 2006 Fund L.P., and
-- $57.1 million in KKR European Fund II, Limited Partnership.
-- Co-investments of $958.1 million in portfolio companies of KKR's
private equity funds:
-- $259.9 million in NXP B.V., a leading semi-conductors business,
-- $250.0 million in HCA Inc., a leading provider of healthcare
services,
-- $200.0 million in The Nielsen Company B.V. (formerly VNU Group
B.V.), a global information and media company,
-- $135.0 million in Capmark Financial Group Inc., a leading
commercial real estate finance company, and
-- $113.2 million in KION Group GmbH, a leading forklift truck
business.
-- Opportunistic investments of $241.9 million:
-- $158.5 million of publicly traded securities, and
-- $83.4 million in KKR Strategic Capital Institutional Fund,
Ltd., a KKR-sponsored opportunistic credit fund.
Subsequent to December 31, 2006 and through March 23, 2007, the Investment Partnership made additional investments, which totaled $1,225.2 million, consisting of the following:
-- KKR's private equity funds - $12.3 million of net capital
contributions with respect to limited partner interests in KKR's
private equity funds.
-- Co-investments of $434.1 million:
-- $235.2 million in PagesJaunes Groupe S.A., the leading
publisher of printed and on-line directories in France, and
-- $198.9 million in ProSiebenSat. 1 Media AG, Germany's largest
television broadcasting group.
-- Opportunistic investments of $778.8 million:
-- $350.0 million in convertible senior notes of Sun Microsystems,
Inc. (net of $350.0 million of financing),
-- $370.5 million of net purchases of publicly traded securities
(net of $226.7 million of financing), and
-- $58.3 million of further capital contributions to KKR Strategic
Capital Institutional Fund, Ltd.
As of March 23, 2007, the Investment Partnership expects to fund an aggregate of approximately $1,225.0 million of additional capital with respect to certain of KKR's private equity fund investments, including related co-investments in:
-- TXU Corp., a Dallas-based energy company,
-- Dollar General Corp., a Fortune 500(R)retailer,
-- Biomet, Inc., a leading designer and manufacturer of musculoskeletal medical products, and
-- Laureate Education, Inc., a leading international provider of higher education.
After taking into account the expected fundings, the Investment Partnership will have remaining undrawn capital commitments to KKR's investment funds of $1.4 billion as of March 23, 2007.
Whether these investments 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, any of these investments will be consummated.
KPE has posted its audited financial statements and the audited consolidated financial statements of the Investment Partnership, as well as an annual operating and financial review, to its website (www.kkrpei.com). KPE encourages investors to carefully read these documents in conjunction with this news release.
Adoption of Equity Incentive Plan
In March 2007, the Board of Directors of KPE's General Partner approved the KKR Private Equity Investors, L.P. 2007 Equity Incentive Plan (the "Plan"). The Plan provides for the grant of options, share appreciation rights (SARs), restricted units and other unit-based awards to eligible directors, officers, employees (if any) and key service providers. The plan allows for the issuance of awards with respect to an aggregate of 1,000,000 common units.
Information for Investors - Teleconference and Webcast
KPE will discuss its financial results on a teleconference to be broadcast live on the Internet on Wednesday, March 28, 2007 at 6:30 pm CEST (Amsterdam) / 5:30 pm BST (Guernsey/London) / 12:30 p.m. EDT (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. (KPE) is a Guernsey limited partnership that seeks to create long-term value by participating in private equity and opportunistic investments identified by Kohlberg Kravis Roberts & Co. (KKR). Formed in April 2006, KPE enables certain public market investors to invest in KKR-identified investments. KPE will invest at least 75% of its assets in KKR's private equity investments, while up to 25% of its assets may be invested opportunistically in other investments identified by KKR. 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, net asset value 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. KPE does not undertake to update any of these forward-looking statements.
KKR PEI INVESTMENTS, L.P. AND SUBSIDIARIES
SCHEDULE OF INVESTMENTS
(Amounts in millions)
----------------------------------------------------------------------
Subsequent
Investment
Activity,
at cost
(Jan. 1,
Fair Value as 2007 to Pending Remaining
of December Mar. 23, Transactions Undrawn
31, 2006 2007) (1) (2) Commitments
------------- ----------- ------------- ------------
KKR's private
equity funds:
KKR European
Fund, Limited
Partnership $326.9 $(9.2) $- $-
KKR Millennium
Fund L.P. 178.2 (7.8) - 3.1
KKR 2006 Fund
L.P. 139.6 14.5 475.0 1,345.9
KKR European
Fund II,
Limited
Partnership 57.1 14.8 - 26.0
------------- ----------- ------------- ------------
701.8 12.3 475.0 1,375.0
------------- ----------- ------------- ------------
Co-investments:
TXU Corp. - - 300.0 -
Dollar General
Corp. - - 250.0 -
NXP B.V. 259.9 - - -
HCA Inc. 250.0 - - -
PagesJaunes
Groupe S.A. - 235.2 - -
The Nielsen
Company B.V. 200.0 - - -
Biomet, Inc. - - 200.0 -
ProSiebenSat. 1
Media AG - 198.9 - -
Capmark
Financial
Group Inc. 135.0 - - -
KION Group GmbH 113.2 - - -
------------- ----------- ------------- ------------
958.1 434.1 750.0 -
------------- ----------- ------------- ------------
Opportunistic:
Sun
Microsystems,
Inc. -
convertible
senior notes
(3) - 350.0 - -
Publicly traded
securities (4) 158.5 370.5 - -
KKR Strategic
Capital
Institutional
Fund, Ltd. 83.4 58.3 - 58.4
------------- ----------- ------------- ------------
241.9 778.8 - 58.4
------------- ----------- ------------- ------------
$1,901.8 $1,225.2 $1,225.0 $1,433.4
============= =========== ============= ============
(1) These investment are reflected at their cost basis, net of any
dispositions and, therefore, do not include any unrealized gains or
losses and may differ from previously disclosed figures about such
investments.
(2) Whether these transactions 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, any of these investments will be
consummated.
(3) Net of $350.0 million of financing as of March 23, 2007.
(4) Net of $226.7 million of financing as of March 23, 2007.
KKR PRIVATE EQUITY INVESTORS, L.P.
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
(Amounts in thousands)
----------------------------------------------------------------------
December 31,
2006
-------------
ASSETS:
Investments in limited partner interests, at fair
value:
KKR PEI Investments, L.P. - Class A (cost of
$3,192,251) $3,321,084
KKR PEI Investments, L.P. - Class B (cost of
$948,180) 950,384
KKR PEI Investments, L.P. - Class C (cost of
$627,924) 700,367
KKR PEI Investments, L.P. - Class D (cost of
$58,213) 64,110
-------------
5,035,945
Cash and cash equivalents 1,116
Prepaid expenses 111
-------------
Total assets 5,037,172
-------------
LIABILITIES:
Accrued liabilities 1,209
Due to affiliate 364
-------------
Total liabilities 1,573
-------------
NET ASSETS $5,035,599
=============
NET ASSETS CONSIST OF:
Partners' capital (204,550,001 common units
outstanding), net $4,830,110
Distributable earnings 205,489
-------------
$5,035,599
=============
Net asset value per common unit $24.62
=============
Market price at December 31, 2006 $22.85
=============
KKR PRIVATE EQUITY INVESTORS, L.P.
CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands)
----------------------------------------------------------------------
From April 18,
2006 (Date of
Quarter Ended Formation) to
December 31, 2006 December 31, 2006
------------------- -----------------
NET INVESTMENT INCOME ALLOCATED
FROM KKR PEI INVESTMENTS, L.P.:
Investment income $50,422 $143,220
Expenses 7,494 12,853
------------------- -----------------
42,928 130,367
INVESTMENT INCOME--Interest
income 32 212
EXPENSES--General and
administrative expenses 1,464 4,100
------------------- -----------------
NET INVESTMENT INCOME 41,496 126,479
------------------- -----------------
REALIZED AND UNREALIZED GAINS
FROM INVESTMENTS AND FOREIGN
CURRENCY ALLOCATED FROM KKR PEI
INVESTMENTS, L.P:
Net realized gain 35,541 34,547
Net change in unrealized
appreciation 37,971 83,327
------------------- -----------------
Net gain on investments and
foreign currency transactions 73,512 117,874
------------------- -----------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $115,008 $244,353
=================== =================
KKR PEI INVESTMENTS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
(Amounts in thousands)
----------------------------------------------------------------------
December 31,
2006
--------------
ASSETS:
Investments, at fair value:
Opportunistic investments--Class A (cost of $154,474) $158,462
Co-investments in portfolio companies of private
equity funds--Class B (cost of $950,145) 958,065
Private equity funds--Class C (cost of $630,508) 701,818
Non-private equity funds--Investment by KKR Strategic
Capital Institutional Fund, Ltd.--Class D (cost of
$77,472) 83,466
--------------
1,901,811
Cash and cash equivalents 2,139,621
Time deposit 1,000,000
Other assets 36,002
--------------
Total assets 5,077,434
--------------
LIABILITIES:
Accrued liabilities 1,503
Due to affiliates 5,722
Unrealized loss on foreign currency exchange
contracts 5,712
Other liabilities 18,098
--------------
Total liabilities 31,035
--------------
NET ASSETS $5,046,399
==============
NET ASSETS CONSIST OF:
Partners' capital contributions $4,836,568
Distributable earnings 209,831
--------------
$5,046,399
==============
KKR PEI INVESTMENTS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands)
----------------------------------------------------------------------
From April 18,
2006 (Date of
Quarter Ended Formation) to
December 31, December 31,
2006 2006
----------------- --------------
INVESTMENT INCOME:
Interest income $50,379 $143,370
Dividend income, net of withholding
taxes of $63 146 146
----------------- --------------
Total investment income 50,525 143,516
----------------- --------------
EXPENSES:
Management fees 5,479 9,874
Incentive fees 1,044 1,044
General and administrative expenses 976 1,941
----------------- --------------
Total expenses 7,499 12,859
----------------- --------------
NET INVESTMENT INCOME 43,026 130,657
----------------- --------------
REALIZED AND UNREALIZED GAINS FROM
INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain 35,614 34,619
Net change in unrealized appreciation 38,051 83,500
----------------- --------------
Net gain on investments and foreign
currency transactions 73,665 118,119
----------------- --------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $116,691 $248,776
================= ==============
CONTACT: Investor Contact: Integrated Corporate Relations Andrew Greenebaum / Anne Rakunas +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)