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May 08, 2006

Will the KKR fund listing prompt other PE firms to go public?

Various international publications - including the UK's Telegraph and IHT - have articles on how Kohlberg Kravis Roberts's (KKR) recent listing of its unit is making other PE firms consider raising "permanent capital" for their funds from public investors. KKR's unit, KKR Private Equity Investors, raised $5-B (£2.7bn) on the Euronext exchange.

From Telegraph:
Blackstone and Carlyle are not the only funds examining the possibility of a flotation. Texas Pacific Group and the smaller Hg Capital and Close Brothers Private Equity are also considering the possibility of listing alternative asset vehicles. "After the size of the KKR flotation, all the big funds have the idea of a flotation on their radar," said a partner at one large private equity company. He added: "Although it is early days, we are all looking at KKR's performance from now on with interest."

Although private equity houses are not yet lining up to float their entire operations, 3i, which is the only private equity and venture capital group in the FTSE100, is viewed as a listed private equity success story. This week, 3i is expected to announce record profits, and has indicated it will return at least £500m of capital to shareholders, possibly via a B share issue. The company is expected to announce its strongest ever realised capital gains and income.

One of India's leading PE firms, IL&FS Investment Managers Limited, is a listed entity.

Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.