These Special Situations include:

Corporate Divestitures and Carve-Outs
KPS targets “orphan” businesses of larger corporations that would benefit from new ownership, including divestitures, spin-offs or carve-outs. We invest our capital based on our ability to effect material improvement in an orphan’s profitability through the implementation of a new business strategy, cost reduction and capital investment. We have successfully created new companies to purchase the assets of orphan businesses in successful divestiture transactions.

Operating Turnarounds

Central to KPS’ investment strategy is a belief that superior investment returns are achieved by catalyzing the turnaround of underperforming or distressed businesses. We often pursue businesses facing the threat of closure, liquidation, or with a history of operating losses. When we encounter a good business experiencing temporary or transitional operating problems, we invest our capital based on our ability to implement a turnaround plan and strategy based on identifiable and reasonably achievable objectives at the closing of a transaction. We prefer to invest in turnaround plans predicated on cost reduction, capital investment and capital availability. We generally do not invest in turnaround plans where success is solely predicated on revenue growth or the ability to complete subsequent acquisitions.

Businesses Operating in Bankruptcy

KPS targets good businesses that are operating in Chapter 11 bankruptcy. We are experts in sponsoring and funding plans of reorganization for a debtors-in-possession or creating new companies to purchase operating assets out of bankruptcy pursuant to Section 363 sales. We have extensive experience in structuring complex transactions involving banks, bondholders, other creditor constituencies and stockholders. We have successfully raised significant capital to provide exit financing to banks and other creditor groups in connection with our bankruptcy activities.

Financial Restructurings

KPS targets businesses with good operations but burdened with insufficient liquidity, excessive debt, operating in default of obligations to creditors, or lacking capital for investment, modernization or growth. We actively seek to invest capital in such opportunities but only in connection with a comprehensive plan to eliminate, reduce or restructure a company’s liabilities.

Out-of-Favor Industries

KPS targets good businesses that cannot otherwise obtain capital because the industry in which they operate is out-of-favor with the capital markets. The capital markets sometimes close to companies operating in industries that are low-growth, cyclical, contracting, or burdened with over-capacity. Because our investment strategy is generally not predicated on achieving investment returns through revenue growth, we have been successful in sponsoring buyout transactions in industries with these characteristics.

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The information set forth in the materials on this site does not purport to be a complete summary of KPS or its investments. No representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information or opinions contained in such materials. No reliance may be placed for any purpose on the information and opinions contained in such materials or their accuracy or completeness and nothing in such materials may be relied upon in making any investment decision. Certain information on or linked to from this site is furnished by or is derived from materials furnished by outside sources. KPS does not assume responsibility for independent verification of such information and has relied on such information being complete and accurate in all material respects. Any information presented by outside sources represents the understandings and opinions of such outside sources, which may differ from those of KPS.  Any performance information included in any document on or linked to from this site is presented for illustrative purposes only and is not indicative of the future returns of any of the funds managed by KPS and there can be no assurance that such funds will achieve comparable results, be able to avoid losses or be able to implement their investment strategies.