KKR to Return Capital From European Annex Fund

By Sabrina Willmer

KKR & Co. will return half of the uninvested capital from a $535.8 million annex fund it raised amid the financial crisis to support its second European buyout fund, two people familiar with the matter said. It also received approval from investors to extend the life of the remaining capital in the fund by another year, after it didn’t meet a January deadline to invest the fund, these people said.

The fund had drawn down $154.2 million as of the end of September. Ludo Bammens, a spokesman for KKR, declined to comment.

KKR gathered $5.75 billion for KKR European Fund II in 2005. Amid the financial crisis in 2009, the firm sought extra money to support at least six companies in its second fund, people familiar said at the time. KKR European Fund II was generating a 1.7 percent net internal rate of return as of Sept. 30, according to the firm’s third quarter 10-Q.

The firm has also made a change to its $5.9 billion third European-focused buyout fund from 2008 that will allow a portion of the fund’s capital to be invested across Africa, according to the people.

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