Disclosure & Transparency Initiatives

Performance of Our Private Equity Funds

Over our 33-year history we have steadily achieved above-market returns through our disciplined investment approach, which seeks to generate large multiples of invested capital and attractive rates of return. We focus on fundamentals and implementing operational and strategic changes that allow us to create and realize long-term value in our portfolio companies. Our consistent results demonstrate the strength of our capital base, infrastructure, skill set, global network and industry and operating expertise. We believe that our leading position in the alternative asset management industry is due to the strategies we have created for sourcing investments and creating value for stakeholders.

Since KKR’s inception in 1976 through December 31, 2008, our more mature private equity funds (including funds from 1976 through the Millennium Fund) have generated a compounded annual gross return of 26.1% and a 2.6 gross multiple of invested capital (net return and net multiple of 19.8% and 2.2x, respectively). While past performance is no guarantee of future results, we are confident that we achieved these results through dramatically different economic cycles by employing a disciplined and adaptable approach to investing, by staying rigorously focused on the long term and by learning from our experiences during over three decades of investing.

The following charts present information concerning the amount of capital invested and the amounts of realized and unrealized returns generated by our traditional private equity funds as of December 31, 2008.

*This report presents information with respect to our fiscal year ended December 31, 2008, and such information has not been updated to reflect facts, events, or figures after that date.