In its recent regulatory filing
Kohlberg Kravis Roberts & Co.
) announced that it was set to close KKR Alternative High Yield
Fund and the KKR Alternative Corporate Opportunities Fund. These
funds have already stopped transactions in the market and are
expected to liquidate by Mar 31. The investors will receive their
money at the same time.
The aforementioned funds were launched in 2012 with the
primary focus on retail investors with limited resources to
invest. Deviating from the convention of catering to a wealthy
client base, the funds seemed promising with the potential to
drive Kohlberg Kravis' profitability in the long run.
However, given the competitive landscape, other companies like
) soon came out with similar products that adversely affected the
funds' performance. Further, as per a Bloomberg report, these
funds were designed in a faulty manner due to which they failed
to survive the market challenges.
Moreover, adding to the woes, the application for KKR
Alternative Corporate Opportunities Fund involved tedious
paperwork for both the advisors and investors. Additionally, the
fund's policy permitted quarterly cash redemption that imposed
restriction on investors' withdrawal of money.
Despite the latest wind-down, Kohlberg Kravis will continue
with its efforts to attract individual clients by offering
innovative products and asset management solutions. Going
forward, we believe that these initiatives, along with the
company's strategic investments will continue to aid top-line
The investment scenario has witnessed drastic changes with
investors being inclined toward alternate forms of investment in
recent times. It is expected that overall improvement in the
equity market, along with increasing risk appetite of investors
will continue to boost profitability for asset managers like
Currently, Kohlberg Kravis carries a Zacks Rank #3 (Hold).
However, some better-ranked investment managers include
Waddell & Reed Financial, Inc.
Fortress Investment Group LLC
). Both these stocks have a Zacks Rank #1 (Strong Buy).
BLACKROCK INC (BLK): Free Stock Analysis
FORTRESS INVEST (FIG): Free Stock Analysis
KKR & CO LP (KKR): Free Stock Analysis
WADDELL&REED -A (WDR): Free Stock Analysis
To read this article on Zacks.com click here.