Yes, the investor call was good. I do exactly what the strategic fund will be doing, except for a different hedge fund. This vehicle will not distract or waste management type, it will simply make more capital available to them, and allow them to into large corporate loan situations which their reit status may have otherwise prevented them from doing. I also that CLOs are very attractively priced right now, so if there was ever a good time to get capital, now is it.
The only issue I have with it, and I am sure others will too, is still on the allocation side. I like the co-investments on equity with KKR here, and I do not want to see those diluted, because they are getting passed on to Strategic Fund. KKR's private equity history is amazing, so any exposure to that here is a must.
Bottom line, there is no way in hell KKR would ever allow this thing to fall off the face of the earth. If it continued to underperform, as it has since its IPO, I would have to believe they would take the assets private and get rid of the REIT conditions. I have several buy orders on this right now from $21-$22.25, and own a lot of it from before at a weighted average cost of $22.22. There is no way this thing drops below book, and it could be as high as $27-$30 by the end of the year, depending on whether they raise the dividend, and if corporate conditions improve. Senior bank loans and high yield are horribly priced right now, that should correct itself in the next 3-6 months, but when it does, there will be a lot more movement into that area.
felt very comfortable with these guys. down to earth, disciplined, and risk adverse executives. the hedge fund should be complimentary, and upon full deployment of capital by end of 2nd quarter, ahare price will reflect accordingly. I think a share price of high 20s is on the table by late summer.
i believe kfn said that their target yeild is 12% or more per year inclusive of dividend and increase in book value thus share price. Did I hear it right ?