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KKR, Nasdaq plan market for trading stakes in buyout funds: WSJ

Private equity firm KKR plans to allow investors to sell parts of their stake in buyout funds through a new private market run by Nasdaq OMX Group, The Wall Street Journal reported on Thursday, citing people familiar with the matter.

In what could be a first in the United States, smaller investors will be able to pick up pieces of these exclusive vehicles for as little as tens of thousands of dollars, the Journal report said.

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Private equity firms usually buy companies by raising debt from major hedge funds and wealthy individuals. The new structure will allow existing investors to exit their investments earlier than usual and help the firms reach a wider investor base.

The exterior facade of the NASDAQ market on the first day of Facebook trading on May 18, 2012.
Ben Hider | Getty Images
The exterior facade of the NASDAQ market on the first day of Facebook trading on May 18, 2012.

KKR is likely to file for regulatory approval allowing trading of fractional stakes of its funds as soon as this month, according to one of the sources quoted in the report.

The report added that other private equity firms are also in talks to sign up for the Nasdaq market and could join before it officially opens.

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The new market would be open only to accredited investors, or individuals with $1 million in wealth, not including their primary homes, the Journal report said.

Kristi Huller, a KKR spokeswoman, and Nasdaq spokesman Joseph Christinat declined to comment on the report.

By Reuters