The Loan to Own Strategy

I’ve been a little obsessed with the private equity firm KKR ever since I read Barbarians at the Gate which detailed their leveraged buyout of RJR Nabisco in 1989. I read an article today on Bloomberg.com that detailed their new strategy. I guess LBO’s are a little too pricey these days so KKR is using the good old “loan to own strategy.” This is where you buy distressed debt for cheap hoping that the borrower defaults so you can take ownership of the property.

We really need to start paying attention, guys. When Zell and KKR start getting into distressed real estate, it’s a sign.

Read the article in its entirety here:

http://www.bloomberg.com/apps/news?pid=20601103&sid=aZaXc0DeZAFU