Global asset manager KKR & Co said it has closed its maiden Asian infrastructure fund after hitting the hard cap at $3.9 billion (Rs 28,646 crore).
The fund will focus on critical infrastructure with “low volatility and strong downside protection”.
It has a broad mandate to invest across emerging and developed countries in the Asia-Pacific in sectors including waste, renewables, power and utilities, telecom, and transport infrastructure, according to a statement
“We believe that the Asia Pacific contains some of the most favourable macroeconomic dynamics in the world, and that the region is expected to account for more than half of the world’s economic growth in the coming years,” Ming Lu, head of KKR Asia, said.
Before this, KKR had been investing from its global infrastructure fund, for which it raised $7.4 billion in 2018. The next year it hit the halfway mark for its first Asian infrastructure fund.
Lu said the demand to develop or upgrade critical infrastructure assets outpaces the available public funding in many markets. Therefore, private capital is playing an increasingly important role to fill the gap in the region. “Through our new fund, KKR is committed to investing in essential infrastructure solutions over a long-term horizon,” he said.
KKR’s Indian infrastructure investments include renewable assets platform Virescent Infrastructure and India Grid Trust.
KKR said the Asian infrastructure fund’s size aligns with the asset manager’s expectations for infrastructure deal flow in the region in the long term. The asset manager invested about $300 million in the fund alongside external investors through its balance sheet and employee commitments.
KKR said the fund was significantly oversubscribed and closed at its hard cap. Debevoise & Plimpton LLP represented KKR as the primary fund counsel for this fundraise.
The vehicle received strong backing from a diverse group of prominent global infrastructure investors, including public and corporate pensions, sovereign wealth funds, insurance companies, endowments, private banking platforms, family offices, and high net-worth individuals.
KKR first established its global infrastructure team and strategy in 2008 and has since then deployed more than $24 billion across around 40 infrastructure investments. It currently has a team of about 45 investment professionals.
In Asia, KKR has committed $1.8 billion across six investments as part of the firm’s dedicated Asia-Pacific infrastructure strategy, which was launched in 2019.
Investments in Asia include Eco Solutions Group, an environmental services provider in South Korea; First Gen, a Philippine power producer; TSK Corporation, an environmental services management company in South Korea; and Pinnacle Towers, a telecom infrastructure provider in the Philippines.
