<article>International private equity (PE) major <a style="color: #000080;" href="http://dealstreetasia.com/tag/kkr" target="_blank" rel="noopener noreferrer">Kohlberg Kravis Roberts &amp; Co (KKR &amp; Co)</a> expects to close its newest Asia-focused private equity fund on upwards of $9 billion this summer.</article>

International private equity (PE) major <a style="color: #000080;" href="http://dealstreetasia.com/tag/kkr" target="_blank" rel="noopener noreferrer">Kohlberg Kravis Roberts &amp; Co (KKR &amp; Co)</a> expects to close its newest Asia-focused private equity fund on upwards of $9 billion this summer.
This was mentioned by CFO William Janetschek on a first-quarter-earnings call.
DEALSTREETASIA had previously reported that <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/kkr-reaches-5-8b-first-close-of-third-pan-asian-fund-69560/" target="_blank" rel="noopener noreferrer">KKR Asia Fund III had reached its first close</a> at $5.8 billion earlier this month. KKR representatives decline to comment on this development when approached by this portal.
Asia has increasingly emerged as a driver of return for the PE major in recent years. Scott C. Nuttall, a Member &amp; Head of Global Capital and Asset Management Group at KKR, has explained in an <a style="color: #000080;" href="https://www.bloomberg.com/news/articles/2016-03-28/kkr-said-to-mull-record-9-billion-target-for-third-asia-fund" target="_blank" rel="noopener noreferrer">interaction</a> with Bloomberg: “In Asia, while we’re a bit cautious given the volatility, we are seeing opportunity come out of the volatility,” Scott Nuttall, head of global capital and asset management at KKR, said on a call with investors and analysts in February. “I’d point you to places like Japan, where we’ve done some corporate carve-outs and think there is more to do there. Chinese services is a theme we like a lot.”
KKR&#8217;s Asia Fund II is fully deployed after an active Q1 2017, with Nuttall explaining that KKR sees lower valuations and better opportunities in Asia. Recently, KKR completed two corporate carve-outs in Japan, according to an <a style="color: #000080;" href="http://files.shareholder.com/downloads/KKR/4371980987x0x939442/91694480-0EA6-48B7-9C1E-0B4D3EF9BD91/KKR_Q1_17_Earnings_Release.pdf" target="_blank" rel="noopener noreferrer">earnings release</a>.
KKR &amp; Co. reported $137.6 billion in assets under management (AUM) as of March 31, up 6 per cent from Dec. 31 and up 9 per cent from a year earlier, according to its earnings report released on Thursday. KKR attributed the AUM increase to new capital raised and an increase in value in its PE and alternative credit businesses.
These increases were partially offset by distributions to private equity fund limited partners. During Q1 2017, KKR also reached a first close for its flagship Asia-Pacific (APAC) PE fund, KKR Asian Fund III.
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<h3>Asian performance</h3>
<figure id="attachment_71485" aria-describedby="caption-attachment-71485" style="width: 700px" class="wp-caption aligncenter"><a href="http://www.dealstreetasia.com/wp-content/uploads/2017/04/kkr2016_deployment_q1-2017.png"><img loading="lazy" decoding="async" class="wp-image-71485 size-full" src="http://www.dealstreetasia.com/wp-content/uploads/2017/04/kkr2016_deployment_q1-2017.png" alt="" width="700" height="496" srcset="https://media.dealstreetasia.com/uploads/2017/04/kkr2016_deployment_q1-2017.png?w=700 700w, https://media.dealstreetasia.com/uploads/2017/04/kkr2016_deployment_q1-2017.png?resize=768,544 768w" sizes="(max-width: 700px) 100vw, 700px" /></a><figcaption id="caption-attachment-71485" class="wp-caption-text">Source: KKR &amp; Co</figcaption></figure>
In a <a style="color: #000080;" href="http://files.shareholder.com/downloads/KKR/2661260502x0x938875/0883F1A2-98E4-4F1F-B7FD-BBFB7FE14231/KKR_2016_AnnualLetter_v3.pdf" target="_blank" rel="noopener noreferrer">letter to unitholders</a>, the firm&#8217;s co-founders, Henry Kravis and George Roberts, explained: &#8220;In Asia, we see Japanese conglomerates increasingly willing to shed non-core businesses creating compelling opportunities for firms with deep industry specialisations and localised investment teams.&#8221;
&#8220;We expect this trend to continue, and we feel well positioned to partner with companies seeking to expand their customer bases and distribution networks while accelerating revenue growth and margin improvement. We have two recent investments that fall into this category, where we acquired businesses from household names, Nissan and Hitachi,&#8221; they added.
Kravis and Roberts further added, &#8220;Within private equity, we closed on more than $5 billion of equity commitments. Large-cap North American and Japanese corporate carve-out opportunities exemplify the broad investment themes and regions where we’ve been busy. We’ve also invested in several Southeast Asian companies, including an integrated poultry producer in Indonesia that we believe is well positioned to leverage the country’s increasing gross domestic product and rising middle-class population.&#8221;
With valuations in the US and Western Europe elevated, this has led to more than half of KKR’s PE investments focused in Asia, with Japan being emphasised.
An example of a major transaction of a portfolio firm in KKR Asian Fund II was Panasonic Healthcare’s acquisition of Bayer Diabetes Care. One of the largest companies in the Asia Fund II portfolio, this acquisition allowed it to expand its reach and drive growth through the creation of a global diabetes care franchise.
For two years running, Asia&#8217;s investment environment has been unsettled and turbulent, with macro tremors ranging from protectionist rhetoric by Trump to the Brexit and concerns over mounting Chinese debt levels, the political scandal in South Korea, and India&#8217;s demonetization drive.
Bain &amp; Co <a style="color: #000080;" href="http://www.bain.com/publications/articles/asia-pacific-private-equity-report-2017.aspx" target="_blank" rel="noopener noreferrer">notes</a> that despite this, 2016 is the third consecutive year that Asian PE has performed at historic or near-historic levels: PE deal value in the Asia-Pacific reached $92 billion in 2016, a pullback from 2015’s all-time high of $124 billion. Exit activity of $74 billion was respectable, and average returns continued to outperform other asset classes, especially among a set of top-tier firms that produced world-class results.
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<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/kkr-asia-fund-iii-new-york-state-crf-71294/">New York State Common Retirement Fund commits $275m to KKR Asia Fund III</a>

PE major KKR will make a $9B final close of KKR Asia Fund III, its third Asian buyout fund, in summer 2017.

KKR Asia Fund III to reach $9b final close in summer 2017

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KKR Asia Fund III to reach $9b final close in summer 2017

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