KKR & Co. LP is planning to close its equity hedge fund in an attempt to restructure and diversify its business. The announcement comes less than three years after the unit called KKR Equities Strategies was founded.
The company made an official e-mailed statement, which was cited by Bloomberg: “We have decided to close KKR Equity Strategies and return capital to investors. We would like to thank Bob Howard and the team for their dedication to the firm and exceptional professionalism in serving our clients.”
According to a person with knowledge of the matter, after the equity hedge fund is liquidated, almost twelve people, including former traders at Goldman Sachs Group Inc. who occupy leading positions at the fund, will leave the company. The fund was headed by Mr. Bob Howard, who worked as an executive of the proprietary trading desk of Goldman Sachs Group and is said to remain in a part-time role of “senior adviser”. Mr. Howard, who started working in the company four years ago, did not respond at the requests to make a comment on the situation.
KKR & Co. LP explained that it plans to become more focused on its Prisma unit, which invests in hedge funds. The division is also concentrated on building strategic stakes, as well as supporting hedge-funds companies. In addition, the company revealed that it is to focus on its own credit hedge funds, which are currently estimated to about 800 million dollars in assets.
According to an announcement made by one of the spokeswomen of the company, the hedge funds “lack of scale” was one of the major factors that made KKR & Co. LP to make a decision of closing it.
KKR & Co. LP was 0.22% down to close at 22.73 dollars per share on Friday, marking a one-year change of +12.97%. According to the information published on CNN Money, the 14 analysts offering 12-month price forecasts for KKR & Co. LP have a median target of 28.00, with a high estimate of 33.00 and a low estimate of 25.00. The median estimate represents a +23.19% increase from the last price of 22.73.
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