KKR Alternative Corporate Opportunities Fund P prices shares at $10

By Toni Weeks

San Diego, Nov. 8 - The KKR Alternative Corporate Opportunities Fund P set a $10-per-share price for its $500 million initial public offering, according to a 497 filing with the Securities and Exchange Commission.

The fund will invest substantially all of its assets in its master fund, the KKR Alternative Corporate Opportunities Fund.

As previously reported, the master fund will seek to generate an attractive total return, consisting of a high level of current income and capital appreciation, by investing in fixed-income and equity securities with a credit-oriented point of view. By investing its assets in the master fund, the KKR Alternative Corporate Opportunities Fund P will share an identical investment strategy with the master fund.

The master fund will focus on investment opportunities related to three broad investment situations: (1) issuer distress, including corporate debt or equity issued by companies that have defaulted on their debt obligations, have filed for insolvency or are selling at discounted prices; (2) event-driven misvaluations of securities that are caused by changes in applicable regulatory regimes, natural disasters, commodity price spikes, management turmoil, and events such as litigation, mergers and other corporate transformations; and (3) capital market inefficiencies due to general dislocations in markets, a lack of financial market following, a misunderstanding in the market of particular industries or companies or industries that may be out of favor with the investment community.

Types of investments for the master fund will include debt securities, loans, preferred stock, convertible securities, common stock and U.S. and non-U.S. government securities.

The fund may invest in both U.S. and non-U.S. issuers, including issuers in emerging market countries. Fixed-income investments may be rated investment grade or below investment grade.

In addition, the fund may engage in short selling and may invest in various types of derivatives, including structured products, swaps, futures contracts and options.

The portfolio management team for the master fund will include Christopher A. Sheldon, William C. Sonneborn, Jamie M. Weinstein, Frederick M. Goltz, Nathaniel M. Zilkha and Erik A. Falk.

The fund is offering 50 million shares; they will not be listed on any securities exchange and will be offered in this initial public offering period as well as in a continuous offering thereafter at the funds' then-current net asset value.

The shares will have no sales load but will be subject to a 2% maximum early repurchase charge. The fund will not have a separate management fee but is indirectly subject to the master fund's fees, including its 1.25% management fee and annual net expenses of 1.8%.

San Francisco-based KKR Asset Management LLC will serve as the funds' investment adviser.

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