The proposed commitment is part of the $850-million that the state’s Investment Advisory Council (IAC) has approved for six private market funds. The proposal will be presented to Minnesota SBI’s meeting on February 26, according to an announcement.
Aside from the $150-million commitment to KKR Asian Fund IV, SBI is also considering a commitment of $150 million to Audax Mezzanine Fund V, $100 million to Oaktree Real Estate Debt Fund III, $200 million to PGIM Capital Partners Fund VI, $150 to CVI Credit Value Fund V, and Oaktree Real Estate Opportunities Fund VIII.
KKR is seeking to raise $12.5 billion for its fourth buyout fund targeting Asia. The proposed amount is about a third greater than its previous $9.3-billion fund raised in 2017, much of which has already been invested. In total, KKR’s three previous Asia funds came to about $20 billion.
Over the next three years, KKR expects to raise close to $100 billion for its three largest funds, which includes the Asian Fund strategy, and other strategies, after raising $94 billion in the last three years outside of its big three funds.
KKR swung to a fourth-quarter profit, with a net income of $523.4 million, compared with a loss of $384.6 million a year earlier. Total revenue at KKR was $1.06 billion for the fourth quarter, compared with negative revenue of $178.1 million a year earlier. Operating revenue totalled $962.1 million, down 11 per cent.
Aside from the proposed commitment to KKR’s latest fund, Minnesota SBI had previously committed $100 million to KKR Asian Fund III and a combined $650 million to the PE firm’s four other vehicles, according to SBI’s fourth quarter 2019 report seen by DealStreetAsia.
Additionally, Minnesota SBI also previously committed $99 million to Asia Alternatives Capital Partners V and $50 million to Warburg Pincus China-Southeast Asia II.
Minnesota SBI is the state agency responsible for the investment management of various retirement funds, trust funds, and cash accounts. As of December 31, 2019, the market value of all assets was $104.3 billion, according to data on its website.