KKR Financial Holdings LLC

A leading specialty finance company. KKR Financial Holdings LLC (NYSE: KFN) has a balance sheet composition that underscores its fundamental strategy.

A Multi-Asset Class Financial Company

KKR Financial Holdings LLC is a specialty finance company focused on making long-term value investments, and utilizing moderate leverage to achieve competitive returns and a consistent dividend yield — while preserving and growing shareholder value. KFN's core business strategy focuses on investing in corporate debt, including senior secured loans, mezzanine loans, and high yield securities with a particular emphasis on debt issued by large capitalization firms with broad geographic and product offerings.

Established in July 2004 by co-founders Saturnino Fanlo and David Netjes, KKR Financial Holdings LLC set out to create a one-of-a-kind specialty finance company that would provide compelling returns to investors by approaching its market in a new way — with a greater emphasis on fundamental value investing, and a focus on liquidity and achieving long-term results. KKR Financial Holdings LLC is committed to fundamental and patient investing, disciplined execution, and active portfolio management that enable it to generate competitive, leveraged risk-adjusted returns for its investors.

Our portfolio composition is as follows:

KFN Portfolio Composition

Senior Secured Loan

74.1%

Senior Unsecured Loan

2.9%

Structured Finance

0.2%

Bond (Senior Secured)

1.9%

Bond (Senior Unsecured)

7.7%

Bond (Subordinated)

2.4%

Bridge Loan

1.4%

Mezzanine Loan

1.3%

Second Lien Loan

8.0%

Source: KKR Fixed Income Supplemental Information. Data is as of June 30, 2008