We enter attractive new markets. KKR selectively pursues opportunities that will expand our investment structure and products, and complement our entire portfolio.

Strategic Growth Initiatives

For more than three decades, our principal growth strategy has been to expand our existing private equity businesses and to enter attractive new business areas. While recent growth has come from our private equity and credit activities, we see opportunities to develop and sponsor new investment vehicles and structures. These may include raising new types of funds, such as infrastructure funds, mezzanine funds and  geography or industry-specific funds. We believe these new opportunities will allow us to increase the amount of third-party capital we can commit to individual transactions, thereby growing our assets under management and capturing additional income streams.

To support these strategic growth initiatives, we have developed a capital markets business in the United States, Europe, and Asia. Within each of our private equity and fixed income segments, we carry out capital market activities that support our asset management business, increase our investible capital, improve our margins, and allow us to capture additional income streams. KKR Capital Markets, our broker-dealer, provides us with new alternatives and capabilities for distributing our investment products to investors worldwide and further broadens our investor base. We may consider selectively partnering or entering into joint venture arrangements with one or more financial intermediaries in order to provide us with access to additional classes of investors.

In addition, we are taking steps to build up our public equity business. These activities are expected to leverage, where appropriate, the intellectual capital developed in the course of our private equity business to make public equity investments.

Infrastructure

Infrastructure plays a key role in the growth of both developed and developing economies, and we believe that the global infrastructure market provides an opportunity for our unique combination of private investment, operational improvement, and public affairs skills. In May 2008, we announced plans to invest in infrastructure assets on a global basis. This growth initiative is an extension of our private equity business, building on the significant expertise we have established by managing investments in large, complex, and regulated businesses and our record of driving operational improvements in a wide range of industries.

Mezzanine

Mezzanine financing is a hybrid of debt and equity financing. And in recent years, it has become an increasingly attractive form of investment. With the returns that it generates and its presence in the leveraged loan market, we believe that expanding into mezzanine products will allow us to take advantage of synergies with our existing fixed income and private equity business.