THE START of 2014 has been the busiest for private equity exits since 2001, according to Mergermarket, with more than £65bn reaped for funds worldwide in the first quarter alone.
As ever, KKR has been in the middle of the action – floating Pets At Home in London last month and taking Santander Consumer USA public in January. Amid an uptick in sentiment that has seen firms rush to market in recent months, both priced well, delivering a decent boost to KKR’s coffers despite a less-than-impressive performance in the firm’s investment portfolio. Luckily, those sales were enough to drive up the fund’s overall distributable earnings – which it divvies up among shareholders – and helped contribute to a 59 per cent year-on-year rise in its dividend.
KKR has also started selling down stakes in previously floated firms – including Jazz Pharmaceuticals and NXP Semiconductor – to boost earnings. With unsold investments failing to deliver, investors will be hoping the frothy equity markets keep fizzing for a while.