Pensions Criticize KKR Over Fee Refund Spurred by SEC Exam

Some pension funds are criticizing KKR’s communication with investors regarding “erroneously” charged fees; the firm refunded those fees last year, but waited a year tell investors that the refund was the result of an SEC exam.

From the Wall Street Journal:

KKR & Co. is getting unusually pointed criticism from some of its public-pension fund investors, after they discovered that KKR didn’t tell them for almost a year that its decision to refund some money was prompted by a regulatory exam.

The contretemps, rare in the tightly-controlled world of private equity, stems from a Securities and Exchange Commission exam of the industry giant in late 2013. Regulators found that the firm had erroneously charged some expenses and didn’t fully disclose it was collecting certain fees, according to a document obtained from one of KKR’s largest investors, the Washington State Investment Board.

As a result of the SEC findings, the private-equity giant in early 2014 refunded money to investors in some of its buyout funds.

As a result of the SEC findings, the private-equity giant in early 2014 refunded money to investors in some of its buyout funds.

Several KKR investors said they were informed of a fee credit but didn’t learn the reason until after The Wall Street Journal last month broke the news about the SEC exam findings and the refunds.

Read the full Journal article here.

Photo by Securities and Exchange Commission via Flickr CC License