- Statement of Beneficial Ownership (SC 13D)
March 09 2010 - 5:27PM
Edgar (US Regulatory)
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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 13D
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Under the Securities Exchange Act
of 1934
(Amendment No. )*
KKR
Financial Holdings LLC
(Name of Issuer)
Common
Shares, no par value
(Title of Class of
Securities)
(CUSIP Number)
David
J. Sorkin
Kohlberg
Kravis Roberts & Co.
9
West 57th Street, Suite 4200
New
York, New York 10019
212-750-8300
with a copy to
William
H. Hinman, Esq.
Simpson
Thacher & Bartlett LLP
2550
Hanover Street
Palo
Alto, California 94304
650-251-5000
(Name, Address and
Telephone Number of Person
Authorized to Receive Notices and Communications)
(Date of Event Which
Requires Filing of this Statement)
If the filing person has previously filed a statement
on Schedule 13G to report the acquisition that is the subject of this Schedule
13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box.
o
*
The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this
cover page shall not be deemed to be "filed" for the purpose of
Section 18 of the Securities Exchange Act of 1934 ("Act") or
otherwise subject to the liabilities of that section of the Act but shall be
subject to all other provisions of the Act (however, see the Notes).
CUSIP No.
48248A306
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1
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Names of Reporting Persons
KKR KFC Investments LLC
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2
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Check the Appropriate Box
if a Member of a Group
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(a)
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o
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(b)
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x
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3
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SEC Use Only
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4
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Source of Funds
OO
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5
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Check Box if Disclosure of Legal Proceedings Is
Required Pursuant to Item 2(d) or 2(e)
o
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6
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Citizenship or Place of Organization
Delaware
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Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With
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7
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Sole Voting Power
13,153,867
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8
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Shared Voting Power
0
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9
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Sole Dispositive Power
13,153,867
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10
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Shared Dispositive Power
0
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11
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Aggregate Amount
Beneficially Owned by Each Reporting Person
13,153,867
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12
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Check Box if the Aggregate
Amount in Row (11) Excludes Certain Shares
o
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13
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Percent of Class
Represented by Amount in Row (11)
8.3
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14
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Type of Reporting Person
OO
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The percentage of the Common Shares represented by the shares that
are subject to this Schedule 13D is based on an aggregate of 158,359,757 Common
Shares outstanding as of February 18, 2010, which figure is based on
information set forth in the Issuers Annual Report on Form 10-K for the fiscal
year ended December 31, 2009 and filed on March 1, 2010.
2
CUSIP No.
48248A306
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Item 1.
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Security and Issuer.
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This Schedule 13D
relates to the common shares, no par value (Common Shares), of KKR
Financial Holdings LLC, a Delaware limited liability company (the Issuer),
having its principal executive offices at 555 California Street, 50th Floor,
San Francisco, CA 94104.
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Item 2.
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Identity and Background.
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(a) This Schedule 13D
is being filed on behalf of KKR KFC Investments LLC (the Reporting Person).
(b), (c) and (f). The
Reporting Person is a Delaware limited liability company formed in order to
manage the acquisition, holding and disposition of Common Shares by certain
employees of Kohlberg Kravis Roberts & Co. L.P. and its affiliates
(collectively, the KKR Employees).
The principal business office of the Reporting Person is 9 West 57th
Street, New York, New York 10019. Set forth in
Schedule A
is the name,
citizenship, business or residence address and present principal occupation
or employment of each of the managers of the Reporting Person (collectively,
the Managers), as of the date hereof.
(d) and (e). During the
past five years, neither the Reporting Person nor any of the Managers has
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of which any
such person was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
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Item 3.
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Source and Amount of Funds or Other
Consideration.
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The Reporting Person
was formed in order to manage the acquisition, holding and disposition of
Common Shares by the KKR Employees.
The Reporting Person has accumulated the Common Shares subject to this
Schedule 13D on behalf of the KKR Employees from time to time since 2004,
including through the accumulation of shares in the Issuers predecessor
entity, KKR Financial Corp., which were automatically converted into Common
Shares upon the effectiveness of the Issuers reorganization on May 4,
2007. The Reporting Person accumulated
the Common Shares and the shares of the Issuers predecessor through (i) the
participation in capital calls by the Issuers predecessor, (ii) restricted
share awards granted to KKR Financial Advisors LLC (KFA), the manager of
the Issuer, which were subsequently transferred to the Reporting Person and
which are now fully vested, (iii) purchases pursuant to public offerings and
similar capital raising transactions effected by the Issuer and its
predecessor, (iv) open market purchases executed in broker transactions and
(v) contributions of Common Shares previously acquired by certain KKR Employees. To effect the transactions described in
clauses (i), (iii) and (iv) in the immediately preceding sentence, the
Reporting Person used funds contributed to the Reporting Person by the
applicable KKR Employees.
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Item 4.
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Purpose of Transaction.
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The information set
forth in Item 3 is incorporated into this Item 4 by reference.
The Reporting Person
was formed in order to manage the acquisition, holding and disposition of
Common Shares by the KKR Employees. As
described in Item 3 above, Common Shares are only acquired by the Reporting
Person pursuant to purchases made on behalf of, or contributions from, the
KKR Employees, subject to the approval of the Managers.
Although the Reporting
Person currently does not have any specific plan or proposal to acquire or
dispose of Common Shares or any securities exercisable for or convertible
into Common Shares, the Reporting Person, consistent with its investment
purpose, at any time and from time to time may acquire additional Common
Shares or securities exercisable for or convertible into Common Shares or
dispose of any or all of its Common Shares (including, without limitation,
distributing some or all of such shares or securities to the applicable KKR
Employees) depending upon an ongoing evaluation of its investment in Common
Shares and securities exercisable for or convertible into Common Shares,
applicable legal restrictions, prevailing market conditions, other investment
opportunities, liquidity requirements of the Reporting Person and/or other
investment considerations. The
Reporting Person may also distribute some or all of such shares or securities
to the applicable KKR Employees in connection with their departure from
Kohlberg Kravis Roberts & Co. L.P. or one of its affiliates. In addition, the Reporting Person may from
time to time enter into equity swap or other derivative transactions with
respect to its investment in the Common Shares or other securities of the
Issuer.
Other than as described
above, the Reporting Person does not have any present plans or proposals that
relate to or would result in any of the actions described in subparagraphs
(a) through (j) of Item 4 of Schedule 13D, although the Reporting Person
reserves the right to develop such plans or proposals in the future.
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3
CUSIP No.
48248A306
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Item 5.
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Interest in Securities of the Issuer.
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All ownership
percentages set forth herein assume that there are 158,359,757 Common Shares
outstanding as of February 18, 2010, which figure is based on information set
forth in the Issuers Annual Report on Form 10-K for the fiscal year ended
December 31, 2009 and filed on March 1, 2010.
(a) and (b) (i) The
Reporting Person may be deemed to beneficially own 13,153,867 Common Shares,
which excludes 994,973 Common Shares issuable upon the exercise of
options. As further described in Item
6 below, the options are only exercisable upon the registration by the Issuer
of the Common Shares issuable upon the exercise of such options. The 13,153,867 Common Shares that the
Reporting Person may be deemed to beneficially own would, as of February 18,
2010, constitute approximately 8.3% of the Common Shares outstanding. The Reporting Person has sole voting power
and sole dispositive power over any such Common Shares deemed beneficially
owned by it.
(ii) As a manager of
the Reporting Person, each of the Managers has shared voting power and shared
dispositive power with respect to any Common Shares that the Reporting Person
may be deemed to beneficially own and, as such, each may be deemed to
beneficially own such shares. Each
such individual disclaims beneficial ownership of such Common Shares. Neither
the filing of this Schedule 13D nor any of its contents shall be deemed to
constitute an admission that any of the Managers is the beneficial owner of
the Common Shares referred to herein for purposes of Section 13(d) of the Act
or for any other purpose, and such beneficial ownership is expressly
disclaimed.
(c) On January 21,
2010, the Reporting Person distributed 50,205 Common Shares to certain KKR
Employees in connection with their departure from Kohlberg Kravis Roberts
& Co. L.P. or one of its affiliates.
(d) Except as otherwise
described in Item 2, Item 3 and Item 4, no person other than the Reporting
Person and the Managers has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, any of the
Common Shares reported on this Schedule 13D.
No individual KKR Employee has interests in the Reporting Person that
represent the equivalent of more than five percent of the Common Shares.
(e) Not applicable.
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Item 6.
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Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
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On May 31, 2007, the
Issuer, the Reporting Person, KFA and KKR Financial LLC (KFL) entered into
a letter agreement (the Transfer Agreement) pursuant to which KFA
transferred to the Reporting Person options to purchase 994,973 Common Shares
(the Options). The Options were originally granted to KFA by the Issuers
predecessor, pursuant to a Nonqualified Stock Option Agreement dated August
12, 2004 (the First Option Agreement) and a Nonqualified Stock Option
Agreement dated August 19, 2004 (the Second Option Agreement). The Options had an original exercise price
of $10.00 per share, which was subsequently increased to $20.00 per share in
June 2005 in connection with a reverse stock split of the Issuers
predecessors common stock. The
Options became fully vested on August 19, 2007 and expire ten years after
their respective grant dates. Exercise
of the Options is conditioned upon the effectiveness of a registration
statement registering the Common Shares issuable upon such exercise.
The description of the
terms and conditions of the Transfer Agreement, the First Option Agreement
and the Second Option Agreement set forth herein does not purport to be
complete and is qualified in its entirety by reference to the full text of
the Transfer Agreement, the First Option Agreement and the Second Option
Agreement attached hereto as Exhibit 1, Exhibit 2 and Exhibit 3,
respectively, each of which is incorporated by reference into this Item 6.
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Item 7.
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Material to be Filed as Exhibits.
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1.
Form of Letter agreement, dated May 31, 2007, by and
among the Issuer, the Reporting Person, KFA and KFL (filed herewith).
2.
Nonqualified Stock Option Agreement, dated as of
August 12, 2004, by and between KKR Financial Corp. and KFA (filed herewith).
3.
Nonqualified Stock Option Agreement, dated as of
August 19, 2004, by and between KKR Financial Corp. and KFA (filed herewith).
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SIGNATURE
After reasonable inquiry and
to the best of the knowledge and belief of the undersigned, the undersigned
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 9, 2010
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KKR KFC INVESTMENTS LLC
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By:
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/s/ William J. Janetschek
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Name:
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William J. Janetschek
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Title:
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Manager
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Schedule A
MANAGERS
OF KKR KFC INVESTMENTS LLC
The
names and principal occupations of the Managers are set forth below. Each of
the Managers is a United States citizen. The business address for Henry R.
Kravis and William J. Janetschek is c/o Kohlberg
Kravis Roberts & Co. L.P., 9 West 57th Street, Suite 4200,
New York, New York 10019. The business
address for George R. Roberts is c/o Kohlberg
Kravis Roberts & Co. L.P., 2800 Sand Hill Road, Suite 200,
Menlo Park, California 94025.
Name
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Present
Principal Occupation
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Henry R. Kravis
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Co-Chairman and Co-CEO of Kohlberg Kravis Roberts & Co.
L.P.
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George R. Roberts
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Co-Chairman and Co-CEO of Kohlberg Kravis Roberts & Co.
L.P.
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William J. Janetschek
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Chief Financial Officer of Kohlberg Kravis Roberts & Co.
L.P.
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