KKR aims to raise $1.5 billion in 3-year convertible stock offering

(Reuters) - KKR & Co said on Tuesday it was looking to raise $1.5 billion through an offering of mandatory convertible preferred stocks and will use part of the proceeds to build up stakes in companies in its core private equity portfolio.

Private equity firms are trying to bolster their reserves to tap an expected surge in deal volumes following U.S. President Donald Trump's push for less regulation, lower corporate taxes and broadly pro-business policies.

The preferred stock offered by KKR will automatically convert into a number of common shares on or around March 1, 2028, unless it has been redeemed or converted previously.

Shares of the company fell 4% in trading before the bell, deepening a 10% decline for 2025 as of the stock's last close. KKR has a market capitalization of $118.1 billion, per LSEG data.

A convertible preferred stock offering allows investors to buy preferred shares, which often fetch higher dividends than common shares. Investors also have the option to convert their preferred stocks into common shares.

Morgan Stanley and KKR Capital Markets LLC are acting as the joint book-running managers for the offering.

(Reporting by Pritam Biswas in Bengaluru; Editing by Devika Syamnath)