Yesterdayâ€™s W$J reported on the planned IPO of KKR Private Equity Investors, an investment fund managed by Kohlberg Kravis Roberts & Co., the legendary corporate buy-out firm (see here). The shares have begun trading on Euronext Amsterdam at $24.80 per share. According to the W$J, KKR listed the shares in Amsterdam to avoid â€œsome of the detailed disclosure that U.S. exchanges require.â€? I suspect SOX had something to do with it as well.
This is unfortunate. According to this Reuters article, â€œKKR’s latest foray into the public markets, will allow investors to participate in KKR’s investments without needing the minimum $25 million traditionally required to participate in the buyout firm’s funds.â€? Personally, I would consider buying some shares in my IRA to further diversify my portfolio, but I have no idea how to go about buying shares in Amsterdam or what the transaction costs would be. I havenâ€™t been able to track down a copy of the prospectus, and KKRâ€™s website does not even mention the deal. This is, of course, because the SEC casts a wide regulatory net. Generally, a â€œforeign private issuerâ€? (such as the KKR fund) is required to register under the â€™34 Act any class of its securities held by 300 or more U.S. shareholders. And â€™34 Act registration triggers SOX compliance, among other regulatory burdens. Hence, you make sure to stay under 300, which essentially shuts people like me out of the deal.