Only the wealthiest and most
sophisticated investors are allowed to put money into the leveraged buyouts
done by Kohlberg Kravis Roberts.
But that may be changing.
K.K.R. is working with another firm to allow investors to commit
a minimum of just $10,000 for exposure to its private
equity funds, according to a
filing with regulators on Thursday. The new investment product, subject to
approval by the Securities and
Exchange Commission, would be the first time K.K.R. had taken smaller investors
into its core business of buyouts.
Private equity giants, which typically raise their funds from institutions
and ultrawealthy individuals, are trying
to gain access to so-called retail investors, who are seen as a vast new source
of capital. A rival of K.K.R., the Carlyle
Group, introduced a product last year that, in partnership with a third-party
firm, allowed investors to commit as little as $50,000 for access to Carlyle’s
private equity funds.
Like Carlyle, K.K.R. has structured its product to possibly help
it navigate regulatory challenges.
Click here for the full
article in the New York Times DealBook.