KKR Goes Public

KKR, the country's premier private equity fund manager, is going public. Apart from the obvious irony, a firm that made its money taking firms private is going private, there are other lessons here.  First, KKR is not using the traditional 33 Act procedure; it is buying a public company, its subsidiary, listed in Amsterdam, in a stock exchange.  After the deal, KKR will cross list in the United States. The process is a implicit criticism of the American process and American exchanges.  The SEC (and congress) ought to sit up and take note here.  The 33 Act process needs a dramatic overhaul in light of new technology.  A process designed for a paper process needs to be redesigned for the internet.  Second, unlike Blackstone's public offering, KKR's investors are not cashing out; they are buying the sub when its shares are low, not selling the parent when the shares are overpriced.  Third, KKR will use the shares as consideration in deals and in pay packages for insiders, a classic set of reasons for going public.