KKR raises record $11b so far for fourth Asia buyout fund

FILE PHOTO: Trading information for KKR & Co is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 23, 2018. REUTERS/Brendan McDermid/File Photo

Private equity giant KKR & Co has raised approximately $11 billion for its fourth Asia-focused buyout fund, making it the largest pan-Asia private equity fund in the world.

During the company’s second-quarter earnings call Tuesday, KKR’s chief financial officer Robert Lewin said KKR Asia Fund IV is already 20 per cent larger than its predecessor, which closed at $9.3 billion in 2017.

KKR is reportedly seeking to raise $12.5 billion for its fourth Asia-focused buyout fund and the latest figure brings it to nearly 90 per cent of its target. The $11 billion raised so far through July means that it has already surpassed the record $10.6 billion raised by Hillhouse Capital Group for Asia in 2018.

The KKR fund recently secured a $300 million capital commitment from the New York State Common Retirement Fund. It earlier received commitments from Asian limited partners such as life insurance companies Fubon and Cathay and bagged a $150 million investment from the Minnesota State Board of Investment in February.

KKR’s third Asia fund is still actively deploying capital and has recently pumped hundreds of millions of US dollars into businesses such as India’s Jio Platforms and JB Chemicals & Pharmaceuticals, Philippine power firm First Gen and Vietnam-based property company Vinhomes.

“Between the continued economic growth in Asia, secular tailwinds for the alternative space in the region, and our differentiated track record as well as best-in-class local team, we really believe our Asia business can be as big as our North America franchise in the coming years,” Lewin said.

For the entire second quarter of this year, the publicly-listed buyout major raised more than $16 billion, with the Asia private equity strategy taking up the largest component of the capital raised. The rest of the amount was raised through the firm’s first-time funds and adjacent strategies.

Its Asia infrastructure fund is also already $2.5 billion, or about 83 per cent of its $3 billion target.

“We’ve spoken frequently about the significant growth opportunities we have ahead, maybe our biggest is in Asia. Over the past 15 years, we’ve created the leading private equity franchise in the region,” Lewin added.

Co-president and chief operating officer Scott Nuttall said that the firm is “also working on private credit in Asia and growth tech in Asia.”

“We’re bringing, if you will, the rest of the KKR product suite to that part of the world and leveraging this footprint we’ve already built, and adding specific talent in each market as well to be able to execute on all this,” he said.

The firm’s Asia portfolio accounted for 30 per cent of its private equity business, the firm said in the latest earnings call. Its assets under management increased 7.1 per cent from the prior quarter to $221.8 billion.

Largest Asia-focused PE funds raised so far

KKR’s latest Asia-focused fund will add to the record $388 billion of PE dry powder in Asia, as of March 2020. According to a Bain & Co report earlier cited by Bloomberg, more than 3,000 PE firms are jostling to find opportunities in Asia.

Among them is Baring Private Equity Asia, which reached the final close of its seventh PE fund in January at the hard cap of $6.5 billion, exceeding its target by $1 billion.

US alternative investments giant Blackstone also raised nearly $1.9 billion for funds managed by its Asia core-plus real estate investment arm, Blackstone Property Partners Asia in May.

Last year, TPG raised $4.6 billion for its seventh Asia-focused PE fund, TPG Capital Asia VII, while Warburg Pincus made the final close of its China-Southeast Asia-focused PE fund at $4.5 billion.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.