KKR raises $15bn Asia-focused fund

June 2021 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

June 2021 Issue

In April, private equity (PE) powerhouse KKR & Co announced it had raised $15bn for its fourth Asia-Pacific focused fund.

The firm exceeded its original target size of $12.5bn for the fund after receiving “strong support” from new and existing global investors, including those in the Asia-Pacific region. KKR itself will inject about $1.3bn into KKR Asian Fund IV, through the firm and its employees’ commitments. The new fund will be targeting opportunities in consumption and urbanisation trends, as well as corporate carve outs, spin offs and consolidation.

The fund attracted significant commitments in less than a year and a half, garnering commitments from 290 clients, a record for a KKR fund, with 80 investors new to KKR’s PE offerings and clients accounting for 83 percent of the capital committed to Asian Fund III also signing up to the new fund.

“Over the last 16 years we have strategically built our Asia Pacific platform and diverse regional team to unlock what we believe are some of the most compelling investment opportunities in the world given Asia Pacific’s growth and dynamism,” said Ming Lu, head of KKR Asia Pacific. “Our new flagship private equity fund meaningfully adds to our multi-asset platform and strengthens our investment position across the region. We are grateful to our investors who have acknowledged the success of our Asia Pacific strategy and share our conviction in the tremendous potential that the region’s businesses hold.”

“The opportunity for private equity investment across Asia Pacific is phenomenal,” said Hiro Hirano, co-head of Asia Pacific private equity at KKR. “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. We are excited by the diverse opportunities we see and are pleased to deepen our commitment to the region with the close of our new fund.”

“Companies across Asia Pacific are recognizing their potential to become not only national and regional champions but also global leaders in their industries,” said Ashish Shastry, co-head of Asia Pacific private equity at KKR. “Today, with Asian Fund IV and KKR’s local-global partnership approach, we are better positioned than ever to support the expansion of the companies that fuel Asia Pacific’s economy, fund their innovation, and build technology leaders.”

The firm launched its Asia-Pacific platform in 2005, and today has over $30bn in assets under management in the region across strategies, including PE, infrastructure, real estate and credit. The firm’s IV fund is more than 60 percent larger than its immediate predecessor, which was raised in 2017. KKR’s fourth fund will be led by a team of approximately 70 investment professionals based in eight offices across six major Asia-Pacific markets.

KKR’s Asia-Pacific PE portfolio currently includes investments in approximately 60 companies in 11 countries across the region. The firm’s Asia-Pacific platform is gaining some impressive momentum. In January, KKR announced the final closings of its inaugural pan-regional infrastructure and real estate funds – the $3.9bn Asia Pacific Infrastructure Investors Fund and $1.7bn Asia Real Estate Partners Fund.

Since the onset of the COVID-19 pandemic, KKR has been particularly active across Asia and has deployed about $7bn across multiple strategies in the region. In addition to deals in Japan, the firm also struck a $1.5bn deal for India’s Jio Platforms, a digital services business, and a $650m arrangement for Vingroup’s property unit Vinhomes.

Coronavirus-driven growth in the technology sector is expected to influence M&A activity in Asia throughout 2021. PE-backed deals in Asia rose 51 percent to a record $129bn last year, according to Reuters.

Richard Summerfield