KKR welcomes activist ownership

The activist investor, which now owns almost 5% of KKR, ‘shares the vision’ for the future of the private equity giant, according to KKR.

KKR is embracing activist investor ValueAct Capital’s recent acquisition of a chunk of KKR stock, the firm said on Thursday.

During the first-quarter earnings conference call, KKR head of global capital and asset management group Scott Nuttall said the New York-based alternative asset firm has interacted with ValueAct and the experience was positive.

“We welcome ValueAct’s ownership in our stock and welcome their partnership,” Nuttall said during the call with analysts. “We like having smart, long-term investors as shareholders.”

Bloomberg reported prior to the call that San Francisco-based Value Act had purchased nearly 5 percent, or about $750 million in derivatives of KKR shares, citing ValueAct president Mason Morfit speaking at 13D Monitor’s Active-Passive Investor Summit in New York Thursday.

“We’ve had discussions and I think they understand and share the vision we have for the business of the firm,” Nuttall added. “So it’s been a good set of interactions so far and quite positive in the shared perspective on where we can go.”

Shares of the private equity firm were up 75 cents, or 4.25 percent, from the previous close at press time, giving it a market capitalisation of $15.18 billion.

According to ValueAct’s website, it targets companies believed to be undervalued and seeks to work with management or board to maximise the company’s value. ValueAct’s portfolio has 10 to 18 core company investments at any point, in addition to smaller additional investments.

ValueAct was founded in 2000 by Jeffrey Ubben, current chief executive and chief investment officer who had previously been a managing partner at San Francisco-based private equity firm Blum Capital Partners, according to the firm’s website.

KKR posted an economic net income of $668.5 million in the first quarter, up from an economic net loss of $506.9 million a year ago.