KKR Delays Fundraising Drive

Kohlberg Kravis Roberts & Co. will not begin raising its next North American buyouts fund until 2010, peHUB has learned. The buyout giant had originally planned to begin marketing earlier this year, but has since thought better of it. Worth noting that this is an informal postponement, as KKR never actually got to the point of sending out private placement memoranda.

Why the delay (informal or otherwise)? Two reasons: First, it’s just very difficult to raise big buyout funds right now, particularly from traditional backers like public pension systems and university endowments (although it did just manage to close a hefty new European fund).

Second, KKR still has more than $5 billion of dry powder from a $17.6 billion North American fund raised in 2006. That’s a lot of cash, considering that the most recent North American deal it did — a joint venture with recording label BMG — will require a maximum equity check of around $250 million.

I speak a bit more about this in the following video, which also features some new buyout fundraising data from Thomson Reuters: