As Wall Street digests a feast of buyout deals announced during the past few months, one especially active buyout giant, Kohlberg Kravis Roberts & Co., is finding they don't all go down easy.
KKR has tapped out some of the traditional investors it might typically turn to in funding large transactions, setting it on a different course in the $26 billion acquisition of First Data Corp., a processor of electronic payments. People familiar with the matter say the deal isn't in jeopardy, but in its search for new partners in the acquisition, KKR finds itself haggling over terms it once could dictate.
Apparently some of their traditional investors are getting wary of putting more money with KKR:
"We have enough exposure to KKR already," says an executive at one major investor who invests money in private-equity firms on behalf of a variety of pension funds, endowments and wealthy families. "We have concentration limits with the private-equity firms and with KKR, we have reached the limit."
With interest rates rising, making borrowing more expensive for these types of deals, and now apparently some difficulty raising equity money, the beginning of the end of the private equity boom may be in sight. Maybe the Chinese will get in right at the top; just as the Japanese did before them in the 80s.