Global investment powerhouse KKR & Co has raised an initial $698 million for its new Asia-focused real estate vehicle, KKR Asia Real Estate Partners SCSp, according to its latest filing with the US Securities and Exchange Commission.
The fund, which was launched 12 months ago, received commitments from 21 investors as the firm looks to deepen its real estate portfolio in the region amidst the global coronavirus pandemic.
The filing did not disclose the fund’s target amount but a Reuters report last year hinted that KKR was committing $250 million in capital to a new $1.5 billion Asia-focused real estate vehicle.
The fund was launched in June 2019, the filing showed. A year earlier, investment firms raised $18.6 billion in 26 Asia-focused real estate funds, the highest since 2008, according to data from market research firm Preqin.
Blackstone Group, KKR’s US-based rival, raised $7.1 billion for its Asia-focused real estate fund in 2018.
The initial close of the Asia real estate fund comes as KKR also raised more than $10 billion for its third Asia fund, which is on track to become the biggest buyout fund for the region. At its full size of $12.5 billion, the fund will surpass a record $10.6 billion raised by Hillhouse Capital Group for Asia in 2018.
KKR raised $94 billion in the last three years outside of its big three funds – Asia Private Equity, Americas Private Equity, and Global Infrastructure. Before the coronavirus pandemic, the firm expected to exceed that number over the next three years with the launch of major funds and additional strategies, including the Asia-focused infrastructure fund.
Early in May, KKR made headlines when it reported an 11 per cent jump in its after-tax distributable earnings in the first quarter, driven by growth in asset sales and management fees ahead of the coronavirus-linked market turmoil.
The firm is betting big on Asia where its portfolio accounts for over 30 per cent of its private equity business. KKR said its significant exposure in the region has been “hugely helpful” as businesses here are starting to set foot on the road to recovery in the wake of the COVID-19 pandemic.