KKR Refunds Investors for Wrongly-Charged Fees

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In response to an SEC examination, private equity firm KKR & Co. has refunded some fees it charged investors in a handful of its funds.

The SEC last year said that some firms were charging investors “hidden fees” without proper disclosure.

From the Wall Street Journal:

KKR’s refunds were disclosed in a pension-fund document obtained by The Wall Street Journal through an open-records request. The precise amount of the refunds couldn’t be determined, but a Journal analysis suggests one set of refunds likely amounted to less than $10 million, while the other may have been similar in size or smaller.

KKR declined to comment on its discussions with regulators.


According to the notes, KKR officials said the SEC determined that the private-equity firm from 2009 to 2011 had allocated certain expenses to its private-equity funds that “should not have been allocated to the funds.”

As a result, the notes said, KKR gave “fee credits” to the investors in those funds. The sums were blanked out, but the total of such credits was listed as “$X million,” and the credit to the Washington state pension fund was listed as “$X thousand.”


The SEC staff also found fault with the way KKR handled disclosure of fees it collects from steering portfolio companies into a group-purchasing program run by a company called CoreTrust Purchasing Group, the notes show.

Read the full WSJ story here.


Photo by c_ambler via Flickr CC License

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