KKR Private Equity Investors, the publicly traded buyout fund of Kohlberg Kravis Roberts & Co., wrote down stakes in seven investments as a slowing economy hurt earnings and declining bond prices eroded the value of holdings, Bloomberg News reported Friday.
The fund marked down its stake in Dutch chip maker NXP by 25 percent and in ProSiebenSat.1 Media, the biggest broadcaster in Germany, by 27 percent, the company, listed in Amsterdam, said Friday. KKR also cut by more than 80 percent the value of its holding in ATU, the German car-repair company it bailed out last week.
"Capital is not nearly as plentiful as it was a year ago and the cost is much higher," Henry Kravis, a co-founder of Kohlberg Kravis, said during a conference call with investors. "It's possible to get deals done in this environment. It just takes more work and a lot of creativity."
Falling bond and loan prices indicate that private equity firms may struggle to profit from their investments, after a record $1.4 trillion of takeovers in 2006 and 2007. A slower U.S. economy is also hurting sales at the companies they own. KKR is raising €7.7 billion, or $11.7 billion, for its biggest European takeover fund.
Publicly traded private equity funds like KKR mark the value of their holdings to market each quarter and disclose the results, unlike traditional private investment partnerships.
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