One of the most powerful gloabl private equity firms, Kohlberg Kravis Roberts (KKR),  will go public on the New York stock exchange.

It plans to acquire its Amsterdam-listed investment fund KKR Private Equity Investors, L.P, and list the new company in New York, converting itself in to a publicly listed company, after its plans to make a public offer of $1.25 billion fizzled out because of the credit market squeeze, that has seena slide in the shares of rival Blackstone that went public last year.

Private equity firms have faced an uphill task raidsing finances in the afternmath of the credit squeeze caused that has cut them off from low-cost loans to finance their acquisitions.

Under the terms of the agreement, KPE unitholders and related depositary units would receive equity interests in KKR, after which KPE would be dissolved and delisted from Euronext Amsterdam.

Upon completion of the transaction, those interests would constitute 21 per cent  of the equity in the combined business. The remaining 79 per cent of the equity in the combined entity would be retained by KKR executives.

In addition, KPE unitholders would receive a contingent value interest providing consideration of up to an additional 6 per cent of the equity in the combined company as of the completion of the transaction to the extent that KKR units trade below a specified threshold, tied to KPE's June 30, 2008 net asset value, three years after completion of the transaction.

The transaction does not involve the payment of any cash consideration or involve an offering of any newly issued securities directly to the public for cash. KKR executives are not selling any equity interests in the transaction.

Completion of the transaction is subject to approval by KPE unitholders holding a majority of KPE's common units (excluding units whose vote is controlled by KKR and its affiliates) and other customary closing conditions.

Henry R. Kravis and George R. Roberts, who co-founded KKR in 1976, said in a statement, ''This transaction offers substantial benefits for KPE unitholders, and builds KKR for the long-term. Going forward, KPE unitholders will benefit by being owners in a diversified asset management business that generates regular distributions of cash earnings. For KKR, this transaction provides us with additional capital for our business.

"Moving forward with a public listing will allow KKR to do what we do best -- grow companies around the world and produce solid returns for our investors from a larger platform and a deeper capital base.''

KKR also announced today that it expects its assets under management as of 30 June 2008 to be approximately $60.8 billion, up from $53.2 billion on 31 December 2007.

KKR's 1989 buyout of tobacco giant RJR Nabisco was the subject of the best-seller, "Barbarians at the Gate: The Fall of RJR Nabisco".