NEW YORK (Reuters) – Private equity firm Kohlberg Kravis Roberts & Co (KKR.AS) said on Friday that it will at some point raise a new private equity fund, but stressed it still has $5 billion left to spend from its previous fund raised in 2006.
Investors have been anticipating KKR raising a new fund for more than a year but don’t expect it to be close to the size of its previous global buyout fund — an $18 billion fund raised in 2006.
Fund-raising for private equity since the economic meltdown has been extremely hard as investors have been strapped for cash, so few buyout firms have actually launched fund-raising efforts.
“We do believe we have enough capital to conduct our business in private equity in North American,” KKR executive Scott Nuttall said on a conference call to discuss the company’s earnings, released on Thursday.
KKR has about $5 billion capital remaining to invest from its 2006 fund, he said.
“At some point we’ll start a fund-raising process for our North American private equity fund but as we sit here today we have enough capacity to conduct the business,” Nuttall said.
Nuttall said that the investment opportunities “are increasing and our pipeline is full.”
KKR also said the value of its private equity portfolio rose nearly 10 percent during the first quarter as markets improved and the companies it owns increased earnings.
KKR is one of the biggest private equity firms in the world, with investments in companies such as retailer Dollar General Corp (DG.N), hospital operator HCA and media company Nielsen.
Currently traded on Euronext, it is in the process of moving to the New York Stock Exchange. It said earlier this week it will sell $500 million of new units after it becomes a publicly traded U.S. company.
KKR on Thursday reported a sharp increase in first-quarter earnings as fee income and the value of its investments rose.
Economic net income, a measure used by private equity firms to report earnings, was $674.8 million for the quarter, compared with a pro-forma figure of $2.5 million a year ago, KKR said.
Nuttall said the value of KKR’s private equity portfolio in aggregate rose 9.9 percent in the first quarter, which he said outpaced the S&P 500 return of 5.4 pct.
Rival private equity firm Blackstone Group (BX.N) reported in April economic net income of $360 million for the first quarter compared with a loss of $82 million a year earlier.
Blackstone said at the time the value of its private equity portfolio rose 16 percent in the first quarter and its real estate portfolio rose 12 percent.
(Reporting by Megan Davies; Editing by Phil Berlowitz)