Global private equity giant KKR & Co announced raising $3.9 billion for its first Asia-Pacific infrastructure fund, the largest in the region that focuses on infrastructure-related investments.
The fund – KKR Asia Pacific Infrastructure Investors – originally had a target of $3 billion when it was launched in 2019. KKR, however, raised its target on the demand. The firm and its employees contributed $300 million in capital, according to the announcement.
It also received strong backing from global infrastructure investors, including public and corporate pensions, sovereign wealth funds, insurance firms, endowments, private banking platforms, family offices, and high net worth individual investors.
KKR said the fund will focus on critical infrastructure with low volatility and strong downside protection. It has a broad investment mandate across both emerging and developed Asia-Pacific countries in sectors including waste, renewables, power and utilities, telecommunications, and transportation infrastructure.
“The demand to develop or upgrade critical infrastructure assets outpaces the available public funding in many markets. Private capital is playing an increasingly important role to fill the gap in the region,” said KKR Asia Pacific head Ming Lu.
KKR first established its global infrastructure team and strategy in 2008 and has since been one of the most active infrastructure investors around the world.
Over this period, the firm has deployed more than $24 billion across approximately 40 infrastructure investments, and currently has a team of approximately 45 dedicated investment professionals.
KKR’s Asia Pacific infrastructure head David Luboff said infrastructure is a key priority for the firm in the Asia Pacific.
In Asia, the firm has committed $1.8 billion across six investments as part of its dedicated Asia Pacific infrastructure strategy, which was launched in 2019.
KKR’s Asia Pacific infrastructure portfolio includes India Grid Trust, India’s leading infrastructure investment trust; Virescent Infrastructure, a renewable energy company in India; Eco Solutions Group, a leading environmental services provider in South Korea; First Gen, a Philippines-based power producer; TSK Corporation, an environmental services management company in South Korea, and Pinnacle Towers, a telecom infrastructure provider in the Philippines.
The infrastructure fund’s final close comes as KKR has so far raised approximately $13 billion for its fourth Asia-focused buyout fund, which is already a record figure and the largest pan-Asia PE fund in the world.
The amount is more than the $12.5-billion reported target for the fund. In July, KKR Asia Fund IV raised $11 billion to surpass the record $10.6 billion raised by Hillhouse Capital Group for Asia in 2018.
KKR’s third Asia fund is still actively deploying capital. For the entire second quarter of 2020, 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.