Buyout firm KKR files for $1.25 bln IPO

By Michael Erman

NEW YORK (Reuters) - KKR & Co. LP KKR.UL, the prominent U.S. buyout firm that pioneered the leveraged buyout industry, filed with regulators on Tuesday to raise up to $1.25 billion in an initial public offering.

The planned IPO follows last month's high-profile listing of rival Blackstone Group LP (BX.N: Quote, Profile, Research, Stock Buzz), which raised $4.13 billion and ushered in a new era for an industry that has come to dominate financial markets worldwide by pursuing ever-larger takeovers and raising record amounts of capital.

Unlike the Blackstone IPO, however, KKR's owners are not selling any common units or receiving any net proceeds.

Blackstone's co-founders, Stephen Schwarzman, 60, and Peter Peterson, 81, earned a huge windfall from the Blackstone offering, pocketing more than $2.4 billion between them.

The relatively modest size of the offering and the timing of the announcement -- late on the eve of the U.S. Independence Day holiday -- suggested that KKR hopes that its IPO will be a lower key affair than Blackstone's, which attracted unwelcome attention from Congress.

Last year, KKR raised $5 billion for a publicly traded fund on the Euronext exchange -- KKR Private Equity Investors LP (KKR.AS: Quote, Profile, Research, Stock Buzz).

Now, KKR plans to take a portion of its own general partnership public.

"It's not surprising. KKR had already tested the public markets. If this offering performs well then other firms are sure to follow," said Monte Brem, CEO of StepStone Group, a private equity consultant and asset manager.