Publicly traded private equity

Because private equity had been booming in the preceding years, the proposition of investing in a KKR fund appeared attractive to certain investors.

[8] KPE disclosed in May 2008 that it had completed approximately $300 million of secondary sales of selected limited partnership interests in and undrawn commitments to certain KKR-managed funds in order to generate liquidity and repay borrowings.

[9] Less than two weeks after the Blackstone Group IPO, in 2007 Kohlberg Kravis Roberts filed with the SEC[10] in July 2007 to raise $1.25 billion by selling an ownership interest in its management company.

The onset of the credit crunch and the shutdown of the IPO market would dampen the prospects of obtaining a valuation that would be attractive to KKR and the flotation was repeatedly postponed.

The initial public offering completed by Blackstone intensified the level of attention directed toward the private equity industry overall as media commentators focused on the large payout received by the firm's CEO Steve Schwarzman.

An ill-timed birthday event around the time of the IPO led various commentators to draw comparisons to the excesses of notorious executives including Bernie Ebbers (WorldCom) and Dennis Kozlowski (Tyco International).

When Steve Schwarzman's biography with all the dollar signs is posted on the web site none of us will like the furor that results – and that's even if you like Rod Stewart.

[13] Similarly, in January 2008, Silver Lake Partners sold a 9.9% stake in its management company to CalPERS for $275 million.