KKR & Co. KKR, +0.82% refunded money to investors in some of its buyout funds after regulators found it overcharged them, marking one of the highest-profile results yet of regulators’ increased scrutiny of the private-equity business.
The decision by KKR, one of the world’s largest private-equity firms, came in response to an examination by the Securities and Exchange Commission, which found the firm wrongly charged investors for some expenses and failed to properly notify them of certain fees it collected, according to a document from one of KKR’s largest investors.
The SEC last year publicly lambasted the industry for charging “hidden fees” to investors in its funds — including public pension plans managing money on behalf of teachers, firefighters and other government employees — and for shifting expenses onto those investors without adequate disclosure.
KKR’s refunds were disclosed in a pension-fund document obtained by The Wall Street Journal through an open-records request. The precise amount of the refunds couldn’t be determined, but a Journal analysis suggests one set of refunds likely amounted to less than $10 million, while the other may have been similar in size or smaller.
