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KKR Arm Breaches $1 NYSE Stock Rule

Henny Sender in New York

The firm now has six months to bring its average share price back above $1.

KKR Financial “plans to notify the NYSE that it will seek to cure the listing requirement deficiency”, the company said.

KKR has already announced bold plans to try to revive KKR Financial, which will be placed under a new asset management division with fresh leadership. It also plans to increase the assets under management at the unit to more than $100bn from under $15bn today.

This is the second make-over of the ailing fund, which invested primarily in mortgage debt and was listed in 2005 just as the mortgage bubble was building up. By the summer of 2007, KKR began transforming KKR Financial from a mortgage investor to an investor in corporate debt.

The debt arms of Carlyle and TPG, KKR’s main rivals, have also fared poorly, a sign that private equity firms are not always successful when they diversify out of the areas of their core strength.

The move comes as KKR maintains the goal of following Blackstone to a listing. But prospects for such a move soon seem elusive. Fortress Investment Group, the private equity and hedge fund firm that began the trend when it went public almost two years ago, also saw its shares fall below $1 this month.

Many listed funds linked to private equity and hedge fund firms have suspended dividends after being doubly hit by a slide in their share price and investor redemptions from their funds.

http://www.ft.com/cms/s/0/0a2af98a-d6cd-11dd-9bf7-000077b07658.html?nclick_check=1

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