Pat McKeough responds to many requests from Members of his Inner Circle for specific stock advice as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle Members. And each week we offer you a report on one of the stocks profiled in these Q&A sessions. We give you Pat’s buy-hold-sell recommendation as well as his analysis of the stock. This is part of the specific buy, hold and sell advice we offer you in our daily posts. Every week you get “A Stock to Sell” on Monday, “Best Canadian Stocks” on Tuesday, and “U.S. Stock Picks” on Thursday.

Recently we had a question from an Inner Circle member about one of America’s best-known venture capital firms, KKR &Co. Previously known as Kohlberg Kravis Roberts & Co., the company earned notoriety when its leveraged buyout of Nabisco in the 1980s became the subject of a best-selling book and TV movie, Barbarians at the Gate. Pat looks at the company’s varied activities in the public, private and capital markets. He also assesses the strategies it is pursuing as it makes a flurry of deals aided by low borrowing rates.

Q: Pat: I was wondering if you could give me any information about KKR & Co. Your thoughts on it would be appreciated.

A: KKR & Co. LP (formerly Kohlberg Kravis Roberts & Co. LP; symbol KKR on New York; www.kkr.com) is an asset manager with 14 offices across North America, Europe, the Middle East, Asia and Australia.

The company serves three main markets: private (investment funds); public (leveraged loans, high-yield bonds, special situation assets, distressed assets and rescue, debtor-in-possession and exit financings); and capital (debt/equity financing).

Founded in 1976, KKR has created a total of 44 investment funds, including 18 private equity funds. The company’s founders, Henry Kravis and George Roberts, continue to head operations as co-chairmen and co-CEOs.

Economic weakness in Europe opens new investment opportunities for KKR

As of September 30, 2014, KKR had $96.1 billion of assets under administration. It continues to take advantage of strong financial markets to sell some of its investments at a profit. In the latest quarter alone, it made 10 sales, the largest being Visma, Modern Dairy and Ipreo. It still has a number of pending deals, including US Foods, Biomet and Alliance Boots.

Meantime, KKR continues to benefit from low borrowing rates and opportunities to buy firms at attractive prices. Recent acquisition targets included Preferred Sands, which supplies sand for hydraulic fracturing (or “fracking”) to oil and gas producers. KKR is also taking advantage of economic weakness in Europe and Asia to make about half of its new investments in those regions.

The stock trades at 7.2 times next year’s forecast earnings of $3.15 a share. It yields a high 8.0%. (Note that the stock’s payout has been consistently high, but it will rise and fall depending on gains and losses from asset sales.)

We view KKR as a hold.