Fidelity, KKR in New IPO Agreement

Retail and institutional brokerage customers of Fidelity Investments can participate in initial public offerings and other offerings of Kohlberg Kravis Roberts companies under a deal announced Monday.
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Retail and institutional brokerage customers of

Fidelity Investments

can participate in initial public offerings and other offerings of

Kohlberg Kravis Roberts

companies under a deal announced Monday.

Fidelity customers will have exclusive access to securities allocated to private-equity firm KKR in all U.S. IPOs and follow-on offerings in which KKR participates as an underwriter, the companies announced in a statement Monday. These customers will be provided access to IPOs they generally don't participate in.

KKR's capital markets business also will gain a new retail distribution channel under the arrangement.

KKR has paid billions of dollars in underwriting fees to Wall Street firms with large investment banks when its portfolio companies issued stocks and bonds, the

Wall Street Journal

reports. Over time, KKR hopes to capture some of these fees for itself, the

Journal

notes.

Mark Haggerty, president of Fidelity Capital Markets, said in a statement the IPO market is beginning to pick up momentum after being slow for the past couple of years.

"We believe that with a portfolio of nearly 50 companies that generate more than $200 billion in annual revenues, KKR will provide a significant source of investment opportunities for our customers over the coming years and be an important strategic relationship for our company," Haggerty said.

Craig Farr, head of KKR Capital Markets, will be in charge of the alliance.

KKR owns almost 50 companies, including

Dollar General

and

First Data

.