Two KKR Alternative Corporate Opportunities funds register shares

By Toni Weeks

San Diego, July 19 - The KKR Alternative Corporate Opportunities Fund has registered shares in an N-2 filing with the Securities and Exchange Commission.

This new fund will be the master fund to a second new fund, the KKR Alternative Corporate Opportunities Fund P, which will invest substantially all of its assets in the master fund.

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.

The 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.

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.

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 and Nathaniel M. Zilkha. Those same individuals, along with Erik A. Falk and Frederick M. Goltz, will comprise the portfolio management team for the KKR Alternative Corporate Opportunities Fund P.

The funds each registered a token 40,000 shares at a proposed maximum offering price of $25 for proceeds of $1 million. The shares will not be listed on any securities exchange and will be offered in an 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. Annual fund expenses, including a management fee, have not yet been determined.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.