Shares of private equity firm KKR rise, then drop in market debut after long trek to NYSE

KKR shares drop in 1st day of trading on NYSE

NEW YORK — Shares of KKR & Co. LP dropped in their market debut on the New York Stock Exchange.

The parent of private equity firm Kohlberg Kravis Roberts has had a long journey toward a U.S. listing. It initially filed plans for an IPO three years ago, before the financial crisis began.

KKR shares opened Thursday at $10.50, trading under the symbol “KKR.” They fell 30 cents, or 2.9 percent, to close at $10.20, after earlier rising as high as $11.08 and slipping as low as $10.20. Broad market indexes fell less than 1 percent.

The company said in a filing with the Securities and Exchange Commission last week that it would register 204.9 million common units worth about $1.93 billion, and said it may later raise about $500 million in a share offering.

KKR & Co. LP first filed to list its shares in the U.S. in July 2007, hoping to raise up to $1.25 billion, after competitor Blackstone Group LP raised $4.1 billion in an initial public offering. It shelved those plans because of the financial crisis.

Instead, KKR began a complicated transition back to a New York listing by first merging with its European arm, KKR Guernsey. The combined company began trading on the Euronext Amsterdam in October 2009. KKR Guernsey was dissolved and ceased trading in Amsterdam Wednesday, and Guernsey stockholders swapped their holdings for U.S.-listed stock.

KKR’s delay in selling stock comes as rival Blackstone’s stock price languishes 66 percent below its IPO price of $31 a share and broader stock markets remain volatile. KKR spokeswoman Kristi Huller said the company had no comment on a timetable for a share sale.

KKR buys companies and then sells them to the public or other investors. In November, it took discount retailer Dollar General Corp. public. In January, it acquired British pet retailer Pets At Home. Its holdings include retailer Toys R Us Inc. and hospital operator HCA Inc.

As of March 31, KKR had assets under management of $54.7 billion, up from $47.4 billion at the same time a year ago. The takeover business struggled during the recession as credit dried up, but it has lately improved for buyout shops. In March, private equity firm Apollo Global Management LLC said it was planning an initial public offering of up to $50 million.

Blackstone said in April that its economic net income, the key financial measure for private equity firms, was $360 million in the first quarter compared to a loss of $82 million in the first quarter of 2009. The Carlyle Group is taking vitamin maker NBTY Inc. private for $3.8 billion in cash, the companies said Thursday, one of the largest deals since the credit crisis struck in late 2007.

Private equity firms have also had an easier time selling their companies back to the public in 2010, although the IPO market remains dicey.

“Today’s NYSE listing is an important milestone for KKR, and will provide an opportunity for investors to share in the value being created by our firm,” said Henry Kravis and George Roberts, founders and co-CEOs of KKR, in a statement.