KKR Delays Its Un-IPO

Can an IPO be postponed if it never really existed in the first place?

That’s the existential question posed today by KKR, which announced that its stock won’t hit the Big Board until sometime next year, after originally having planned to list this quarter.

From an IPO market perspective, this is hardly surprising. No company has priced on a U.S. exchange for months, and the only relevant registration activity has been of the withdrawal variety. But KKR is not blaming “market issues” for the delay. Instead, it says it needs more time to sort out “process issues,” including an expected SEC request for Q3 results that won’t be completed for several more weeks.

The reason for this dichotomy is that KKR’s initial public offering is neither initial nor an offering. Instead, it’s basically a listing transfer – with KKR moving an existing publicly-traded vehicle (KPE) from Amsterdam to New York. That may be a bit simplistic – KPE unit-holders technically get an ownership piece in KKR’s management company, instead of in an affiliated fund – but KKR management will not offer any new shares via the transaction. As such, it doesn’t much matter if the IPO window is wide open or nailed shut.

Of course, it’s also possible that KKR is a bit fearful of how the NYSE will trade its securities. KPE today reported a 22.6% decline in NAV since January, which means an investment value depreciation of nearly $1 billion. It’s one thing to get your shares battered in Amsterdam, and quite another to get slammed in New York…

You can listen to today’s KKR webcast here.