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Date: 2012-07-27
Reuters: KKR to start new capital markets business

July 27 2012                                
(Taken from Reuters,
* KKR, Stone Point to invest $150 mln each
* Business to help arrange middle-market financing
July 27 (Reuters) - KKR & Co LP said on Friday that it would start a new business to offer capital market services to clients other than its portfolio companies in its latest bid to rake in lucrative transaction fees and further diversify revenue from buyouts.
KKR, which in 2006 tapped Craig Farr, Citigroup Inc's North American head of equity capital markets, to build such a business, has so far had little to show in external capital market mandates. A famous exception is an underwriting role on Manchester United Ltd's 250 million pound ($392 million) private bond placement in 2010.
As a result, KKR has ended up arranging debt and equity financing mostly for its portfolio companies, justifying the fees on the basis that it offers a way to test the capital markets itself to ensure access to the most attractive pricing.

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