Using our KKR relationships, we make opportunistic investments in debt. We then apply moderate leverage to debt to increase our return on the investment. We maintain equity capital and a liquid portfolio to be able to respond to liquidity needs and/or opportunities as they arise. In addition, we strive to be a low-cost provider in order to increase shareholder value. Here are the five key elements of our business model or approach as a specialty finance company:

• First, our collective relationships with investment banks, other investment funds and other private equity firms provide us with the premiere product flow in the credit world.
• Second, our approach to due diligence is to access risk from multiple prospectives including credit fundamentals, equity ownership, industry trends, management and sponsor due diligence, and rigorous stress testing.
• Third, our approach recognizes that timely and opportunistic deployment of capital affords superior outcomes.
• Fourth, the ability to deploy large blocks of capital matters to our partners and customers.
• Fifth, people matter. Who we do business with significantly impacts our investment outcomes. 

Our objective is to generate superior, leveraged risk-adjusted returns by focusing on four key principles:

• Credit philosophy — We have an intense focus on credit performance, the competitive environment and industry dynamics.
• Fundamental investing vs. momentum — We are driven by company and investment fundamentals.
• Multi-asset class strategy — This allows us to rotate sectors as industry and economic factors dictate to generate the highest possible returns under our operating and tax model.
• Target investments — We target investments in companies that meet the following:
• Operate with a clear and understandable business model
• Proven, ethical management team
• Demonstrated ability to generate free cash flow and competitive returns on capital
• Sustainable margins
• Ability to withstand various economic environments
• Sustainable competitive advantages
• Favorable long-term industry trends
• Sufficient liquidity

Our unparalleled access to the street and intellectual capital through our KKR relationship, and superior cost structure, are the benefits that set us apart from other specialty finance firms. We have a balance sheet that is bank-like, but without the same infrastructure. Further, as a public, non-regulated specialty finance company, we have greater flexibility in how we invest and finance our business relative to other financial institutions — and have access to KKR relationships, insight and expertise that few other firms can match. We also enjoy lower operating costs. How we allocate capital and leverage our investments are what drive our return on equity — and ultimately what makes us unique.

See the financial reports section of our web site.

Founded in July 2004, we are managed by a subsidiary of Kohlberg Kravis Roberts & Co. L.P., a leading global alternative asset manager. In August 2004, we raised more than $795.0 million in a 144A private offering.  In June 2005, we completed an $848.8 million IPO and began trading on the NYSE under the symbol KFN. Our co-founders include Saturnino Fanlo and David Netjes, as well as Henry Kravis and George Roberts of KKR.  We are taxed as a partnership for federal income tax purposes, and are externally managed by KKR Fixed Income, which is responsible for all services and activities relating to our management, including company assets, liabilities, and operations.

Key senior KKR professionals sit on our Investment Committee, and we have the benefits of a world-class Board of Directors.

Saturnino S. Fanlo, Chief Executive Officer
David A. Netjes, Chief Operating Officer
Jeffrey B. Van Horn, Chief Financial Officer

Saturnino S. Fanlo, Chief Executive Officer
David A. Netjes, Chief Operating Officer
Scott C. Nuttall, Member, KKR
George R. Roberts, Founding Member, KKR
Henry R. Kravis, Founding Member, KKR
Paul M. Hazen, Chairman of the Board of Directors