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KKR’s Investment in Sunrise Senior Living Gains Five Fold after Exit

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The original investment of KKR & Co. L.P. (NYSE:KKR) in a senior-resident management business gained five fold after the private equity firm sold its stake, according to report from Bloomberg based on information from a copy of a letter to investors.

KKR’s original investment

Last February, KKR & Co. L.P. (NYSE:KKR) and its two partners agreed to sell their stakes in Sunrise Senior Living LLC’s management unit for approximately $400 million. The group originally invested $82 million in the senior resident management business in January last year.

KKR & Co. L.P. (NYSE:KKR) and its partners also received approximately $101 million in dividends in May. In addition to the $400 million sale price, the group’s original investment increased more than five times. Majority of the original investment came from KKR.

Transaction completed

Yesterday, Revera Inc., a provider of accommodation, care, and services for seniors in Canada and one of the buyers of the stake of KKR & Co. L.P. and its group in Sunrise Senior Living LLC announced that sale has been completed. Revera partnered with Health Care REIT Inc. (NYSE:HCN), which owns 24% of the senior management business in the transaction. Revera owns the remaining 76%.

In a statement, Thomas G. Wellner, president and CEO of Revera Inc said, “This strategic investment in one of the most trusted brands in seniors housing, with a strong presence in the U.S. and U.K. markets, demonstrates Revera’s commitment to growth in this sector. We are pleased to further strengthen our partnership with Health Care REIT, as we both share a long-term investment horizon and a relationship approach to business.”

On the other hand, Tom DeRosa, CEO of Health Care REIT, Inc. (NYSE:HCN) said, “The business is well-positioned to continue its strong performance and industry-leading service. He added that his company is “committed to having relationships with the best operating and financial partners.”

The decision of KKR & Co. L.P. (NYSE:KKR) to sell its stake in Sunrise Senior Living LLC is its first transaction in its real estate investment since establishing its property unit three years ago. Since Ralph Rosenberg joined the private equity firm as head of real estate in 2011, KKR made investments in 15 properties. Last December, KKR raised $1.5 billion for its real estate fund.

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