KKR seeking new investors through corporation move — 5 insights


New York City-based KKR made the move to become a corporation July 1, hoping to reach out to a new pool of investors, Reuters reports.

Here's what you should know:

1. KKR is transitioning from being a publicly traded partnership to a C-Corp company. As a result, KKR will pay more taxes, but will be able to sell to new investors.

2. KKR first announced the move in May. Speculation on pending demand raised the stock about 20 percent.

3. Market analysts believe the move clears up confusion about some of the more complicated aspects of KKR's business, but Gabelli & Co. analyst Macrae Sykes said, "the nature of their business still comes with complexity."

4. Concerning the tax increases, KKR's tax rate is expected to hit 23 percent as a result. KKR currently pays about 7 percent.

5. Reuters believes other PE firms will monitor KKR's conversion closely and will follow suit if it "pays off," for KKR.

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