KKR just closed $ 15 billion for its Asia-focused private equity fund, surpassing its initial target size after receiving “strong support” from new and existing global investors, including those in the Asia-Pacific region.
The new close came nearly four years after KKR raised its $ 9.3 billion Asian Fund III and marks the New York-based hedge fund titan’s continued interest in Asia. It also makes KKR Asian Fund IV one of the largest private equity funds dedicated to the Asia-Pacific region.
KKR itself will inject around $ 1.3 billion into Fund IV alongside investors through commitments from the company and its employees. The new fund will be looking for opportunities in consumer and urbanization trends, as well as carve-outs, spin-offs and business consolidation.
KKR has been a prolific investor in Asia-Pacific since entering the region 16 years ago with a multifaceted approach that encompasses private equity, infrastructure, real estate and credit. It currently has $ 30 billion in assets under management in the region.
The company has also been active during COVID-19. On the one hand, the pandemic has accelerated the transition to online business and has singled out tech companies that have shown resilience during the health crisis. Market disruptions over the past year have also made valuations more attractive and have prompted companies to seek new sources of capital. Taken together, these strengths provide “increasingly exciting opportunities for flexible capital providers like KKR,” company spokesperson Anita Davis told TechCrunch.
Since the pandemic, KKR has deployed around $ 7 billion in several strategies in Asia.
As KKR searches for offers across Asia, each market offers different opportunities depending on the state of its economy. For consumer upgrade deals, KKR is looking for companies in emerging markets like China, Southeast Asia and India, Davis said. In developed countries like Japan, Korea and Australia, KKR has observed that continued governance reform, coupled with a focus on return on equity (ROE), has resulted in exclusions of conglomerates and spin-offs of multinational companies, Davis added.
Specifically, KKR’s private equity portfolio in Asia includes approximately 60 companies in 11 countries. Some of his most notable deals include co-leading ByteDance’s $ 3 billion raise in 2018 as part of the rapid growth of parent company TikTok and the funding of Reliance Jio with $ 1.5 billion in funding. 2020.
“The opportunity to invest in private equity in Asia-Pacific is phenomenal,” said Hiro Hirano, Co-Director of Asia-Pacific Private Equity at KKR. “While each market is unique, the long-term fundamentals underlying the region’s growth are consistent – demand for consumer upgrades, a rapidly growing middle class, increasing urbanization and technological disruption. “
Asian Fund IV followed in the footsteps of KKR’s other two Asia-focused funds that closed in January, the $ 3.9 billion Asia Pacific Infrastructure Investors Fund and the $ 3.9 billion Asia Real Estate Partners Fund. $ 7 billion.