© Stocksak. FILE PHOTO: Trading information for KKR & Co is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 23, 2018. REUTERS/Brendan McDermid
By Anshuman Daga
SINGAPORE (Stocksak) – KKR & Co (NYSE:) Inc has raised nearly $6 billion for its second Asia Pacific infrastructure fund at the first-close, marking the biggest ever private equity fundraising for the sector in the region, two sources familiar with the matter told Stocksak.
Seven months after its launch, record-breaking commitments were made to the fund. This demonstrates investors’ willingness to invest in diverse infrastructure assets at a time where high inflation and higher rates have slowed deals in many sectors.
According to one source, the latest fundraising came after the U.S. private equity firm used most of the $3.9B capital raised in its inaugural Asia infrastructure fund. It reported its final close in January 2021.
KKR declined to comment. The sources declined to identify themselves as the information is not public.
The first-close in a private equity fundraising process can be seen as a significant milestone. It signifies that the fund has reached a minimum threshold, and can make investments.
Globally, sovereign funds, endowments and insurance companies, pension funds, and family offices have been investing money in infrastructure vehicles to obtain exposure to assets that are seen to offer stable, long-term and inflation-beating return.
BlackRock Inc (NYSE 🙂 announced Tuesday that it has raised $4.5 billion of a $7.5 billion target for a global fund to invest in infrastructure assets and climate-focused projects.
Macquarie Asset Management reported in May that it had received more $4.2 billion in investor commitments during the closing of its third Asia Pacific regional Infrastructure fund. This was well above the fund’s S3B target.
HOTBED FOR DEALS
The latest KKR infrastructure fund will target, among other things, renewables, telecom towers and power.
In particular, Southeast Asia has been a hotbed of infrastructure transactions with billions of dollars of investment flowing into the sector over the past few years.
Funds backed in part by Macquarie, KKR and Stonepeak, infrastructure investors DigitalBridge, Stonepeak, and KKR have reached deals for tens, if not thousands, of telecom towers in the Philippines this year.
Stocksak heard from Permodalan Nasional Bhd (Malaysia’s largest asset manager) that it plans on adding infrastructure assets to its portfolio by 2023.
Preqin’s data revealed that KKR’s latest infrastructure fund would rank Asia Pacific’s largest ever dedicated fund to the industry at $6 billion investor commitments even at the first close.
Preqin data shows that $10.3 billion was raised by 19 infrastructure funds focusing on Asia Pacific last year, Preqin data show.
David Luboff, an investor who joined KKR Singapore in 2019, to lead its Asia Pacific infrastructure business has spearheaded the rollout of the firm’s regional infrastructure strategy. The firm also increased its Asian infrastructure team from 25 to 25.
Luboff, who spent 18 years at Macquarie Group (OTC):, moved to Sydney in the early 2022. He was later named co-head of KKR’s Australian and New Zealand operations.
Neil Arora, a Macquarie veteran infrastructure dealmaker, joined KKR last month as the head for its Asia Pacific energy transition team.