WORLD - KKR cashes in with 44% of global deal volume

KKR has eclipsed its rivals so far this year, claiming a 44.1% share of global deal volume, over double its 20% share since the beginning of 2004. The value of these deals was more than it recorded in 2005 and 2006 combined. This includes the ТЃ10.1bn deal for Alliance Boots in the UK, the ТЃ14.1bn paid for First Data in the US and the largest buyout ever, the ТЃ22.1 deal for US energy firm TXU. It is no suprise that KKR has this amount of resource to deploy, or that it has made its play at this stage of the cycle. For all the talk of a credit crunch, a rise in defaults and a market downturn, there is little in the way of hard evidence to back this up. The Blackstone listing, whilst suggestive of a peaking market, was no more indicative of the state of play than KKR's fevered activity. With less than ТЃ7.5bn spent so far this year, it appears Blackstone has taken the view its listing suggested, holding back to play a waiting game. However, with banks willing to stump up equity (witness the seven banks providing an 'equity bridge' for the Alliance Boots deal), covenants loosening and asset-based lending allowing even larger slices of debt to be served up, KKR may be playing the smart game. The free and easy spirit predominant in the credit markets will not last, although a tightening will not presage a collapse and therefore taking advantage now seems practical.