Private equity giant KKR & Co announced that it had closed its fourth Asia-focused buyout fund at $15 billion, the largest PE fund dedicated to investing in the Asia Pacific region.
KKR Asian Fund IV exceeded its $12.5-billion target and surpassed the record $10.6 billion raised by Hillhouse Capital Group for Asia in 2018. KKR said it will invest approximately $1.3 billion alongside fund investors through the firm and its employees’ commitments.
The fund received strong support from diverse new and existing global investors, including Asia Pacific-based investors.
Among others, the New York State Common Retirement Fund committed $300 million while the Minnesota State Board of Investment chipped in $150 million. The fund also received commitments from life insurance firms Fubon and Cathay.
“The overwhelming response for Asian Fund IV validates our strategic focus and investment discipline, especially given the competitive and current environment,” said Alisa Amarosa Wood, KKR’s head of Private Markets Strategies Group.
KKR’s third Asia fund, which closed at $9.3 billion in 2017, has been fully deployed.
The final close of Asian Fund IV builds on the momentum across the PE firm’s Asia Pacific platform. In January, KKR also announced the final closings of its inaugural pan-regional infrastructure and real estate funds – the $3.9-billion Asia Pacific Infrastructure Investors Funds and the $1.7-billion Asia Real Estate Partners Fund.
Fund IV will pursue opportunities stemming from rising consumption and urbanisation trends, as well as corporate carve-outs, spin-offs, and consolidation as companies look to optimise their portfolios, KKR said.
The strategy is led by a team of approximately 70 investment professionals based in eight offices across six major Asia Pacific markets.
“The opportunity for private equity investment across the Asia Pacific is phenomenal. While each market is unique, the long-term fundamentals underpinning the region’s growth are consistent – the demand for consumption upgrades, a fast-growing middle class, rising urbanization, and technological disruption,” said KKR’s Asia Pacific PE co-head Hiro Hirano.
The final close of Fund IV also helped revive the lacklustre fundraising performance of Asia-Pacific-focused funds in 2020. According to the latest report by global advisory firm Bain & Co, funds focused on the region raised just $90 billion last year, a 32% decline year-on-year.
However, despite the global COVID-19 disruption, PE investors in the region generated a record high deal value of $185 billion in 2020, the report added.
In Southeast Asia, four PE funds managed to record a final close in 2020 – three of these were closed in the second half of the year – with a total corpus of $1 billion. This compares to five final closes with $1.3 billion in total value in the previous year.
Last month, Singapore-headquartered Asia Partners, launched by former Sea Ltd president Nick Nash and Naspers B2C e-commerce division’s former CEO Oliver Rippel, announced the final close of its inaugural PE fund at $384 million.