KKR Doubles European Lending as Banks Retreat

KKR has almost doubled its direct lending to troubled companies as Europe’s financial crisis forces banks to retreat.

KKR’s special situations group, which focuses on European distressed debt, increased its investments – mostly in the form of privately negotiated lending arrangements – to $512.5 million in the first half, from $260 million in the first six months of 2011 and a 23 percent increase over last year’s second half, according to Nat Zilkha, co-head of the unit within KKR Asset Management.

The firm is stepping up its direct-lending as stringent regulatory requirements makes it more expensive for banks to extend credit.

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