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* Portfolio marked up 18.5 pct for quarter

* Over 90 pct of its deals historically under $5 bln

* Sees opportunities for smaller, less leveraged deals

By Megan Davies

NEW YORK, Nov 20 (Reuters) – Private equity giant Kohlberg
Kravis Roberts & Co (KKR.AS) said current deal opportunities
include buying noncore subsidiaries from companies and
providing rescue and growth capital, rather than the large
public-to-privates it is known for.

“In an environment like today, with constrained credit
availability and a tougher economic backdrop, we tend to make
smaller investments,” said partner Scott Nuttall, who hosted
the New York-based private equity firm’s first conference call
as a public company.

Nuttall said that over 90 percent of KKR’s more than 170
private equity deals have been smaller than $5 billion, and
almost 80 percent of them smaller than $2 billion.

“This is in part because we have often invested in those
parts of the economic cycle where credit was less plentiful,”
he said.

Nuttall said that instead of public-to-private deals,
attention during these periods shifts to buying noncore
subsidiaries from firms dealing with liquidity issues and to
making growth-equity and rescue-capital investments.

“These investments tend to be made at lower valuations with
less leverage and more equity,” Nuttall said. “We are seeing
investment opportunities like these today.”

Nuttall added that during the third quarter, KKR marked its
private equity portfolio 18.5 percent higher. KKR reported its
third-quarter earnings on Thursday, and said economic net
income was $656.6 million for the quarter ended Sept. 30.

The private equity firm closed a long-awaited deal in
October to buy its Amsterdam-quoted fund, becoming a
Euronext-listed company and completing the first step toward an
expected move to the New York Stock Exchange.

On the conference call, KKR said it believed the prospects
for a U.S. listing are attractive and it would be considering
it seriously. Under the terms of its deal with the Amsterdam
fund, it has the ability from February to seek a listing in New
York.

KKR has been planning for two years to follow rival
Blackstone Group (BX.N) in becoming a publicly traded company.
(Editing by Gary Hill)