PE firm KKR raises $1.1b for inaugural Asia credit fund

Photo: Reuters

Private equity major KKR & Co has announced the final close of its inaugural KKR Asia Credit Opportunities Fund (ACOF) at $1.1 billion, making it one of the largest inaugural pan-Asia credit funds to date.

The fund, which focuses on performing privately originated credit investments in Asia Pacific, is KKR’s continued buildout in the region. KKR invested over $100 million in the fund, alongside external investors, through its balance sheet and employee commitments.

ACOF targets opportunities across three primary investing themes, including senior and unitranche corporate lending, subordinated corporate lending, and asset-based finance investments.

The latest vehicle also follows the PE firm’s $15-billion flagship Asia private equity fund, $3.9-billion inaugural Asia infrastructure fund, and $1.7-billion Asia real estate fund in 2021, according to the announcement.

KKR said the inaugural Asia credit fund received support from a diverse group of new and existing investors, including public and corporate pensions, sovereign wealth funds, commercial banks, insurance companies, asset managers and private investment groups, and family offices.

“Our credit strategy is highly complementary to our existing equity strategies in Asia, and the close of ACOF represents a significant milestone for KKR in Asia Pacific as we continue to build out our suite of investment capabilities and capital solutions across asset classes,” said Ming Lu, head of KKR Asia Pacific.

KKR established its credit platform in 2004, and made its first private credit investment in 2005. Today, the firm manages approximately $184 billion of credit assets globally, including about $102 billion in leveraged credit, $71 billion in private credit, and $10 billion in strategic investments, as of March 31, 2022.

In Asia Pacific, KKR has closed 14 credit investments since 2019, accounting for approximately $2.4 billion invested by the firm and total transaction value of $4.7 billion.

KKR Credit has been active in markets including Australia, Greater China, India, Korea, Malaysia, New Zealand, Singapore, and Vietnam.

In February, KKR announced plans to raise funds for five Asia-focused strategies outside of PE this year, including infrastructure, real estate, credit, and growth businesses.

The new Asia-focused funds are amongst the 30-plus strategies KKR plans to raise in 2022. Last year, KKR closed its pan-regional private equity vehicle, Asia Fund IV, at $15 billion, which is the biggest fund dedicated to the region.

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