KKR predicts more losses in Q3(2)

The buyout giant estimates that the value of its private equity investments, $31.8bn as of 30 June, will continue to decline in the third quarter, according to a regulatory filing. It previously recorded a $1.2bn loss on its investments for the first half of 2008.

Kohlberg Kravis Roberts, which has already recorded $1.2 billion in investment losses for the first half of 2008, expects more to come in the third quarter of 2008, according to a Securities and Exchange Commission filing.

As of 30 June, KKR’s private equity portfolio stood at $31.8 billion, or 97.1 percent of its total investments.

“We have not yet completed our September 30, 2008 valuation process; however, it is currently estimated that the aggregate value of these private equity investments as of that date will reflect a decline from June 30, 2008,” KKR said in the filing.

Henry Kravis

No further estimates were disclosed.

KKR cited the lack of credit together with declines in valuations of equity and debt securities as negative pressures that will continue to put pressure on its operating results.

The predicted losses were part of an updated regulatory filing made by the company as part of its ongoing effort to go public.

Despite the ongoing market turbulence, KKR is pushing ahead with its plans – announced in July – to acquire its Euronext-listed vehicle KKR Private Equity Investors, known as KPE for short, and subsequently list the combined entity on the New York Stock Exchange before the end of the year.