KKR raises $6b for Asia fund - report
KKR is said to have reached the $6 billion target for its second pan-Asia fund. It is the largest vehicle ever raised in the region, topping the $4.25 billion raised by TPG Capital for its fifth Asia fund in 2007.
According to Reuters, strong demand from pension funds and endowments left the vehicle over-subscribed. KKR even blames the popularity of the Asia fund for the slow progress of its latest North America-focused vehicle, with Scott Nuttall, the firm's head of global capital and asset management, noting that there is significant overlap in the two funds' investor bases.
KKR, which raised $4 billion for its debut Asia vehicle in 2006, announced a first close of more than $3 billion on Fund II in June. Third-party investors pledged $2.76 billion with general partners putting in a further $250 million.
Washington State Investment Board announced in February that it had committed $400 million to the fund, while Oregon Public Employees Retirement Fund confirmed it would invest $200 million, Oregon's Common School Fund pledged $25 million and Taiwan insurer Cathay Financial put in another $30 million.
Washington State and Oregon Public Employees were both LPs in Fund I. Other investors included California Public Employees' Retirement System (CalPERS), Canada Pension Plan Investment Board (CPPIB) and New York State Common Retirement Fund.
According to CalPERS, KKR Asian Fund had delivered an IRR of 11.4% and a money multiple of 1.37x as of June 30, 2012. This is superior to the comparative Asia vintage TPG Capital, CVC Capital Partners and The Carlyle Group funds that appear in the CalPERS portfolio. Affinity Equity Partners' third fund has a 14% IRR and a 1.43x money multiple.
Several global and regional buyout firms are currently in the market raising Asia funds, some targeting considerably larger corpuses than in the previous cycle. TPG and Carlyle are said to be seeking around $4 billion and $3.5 billion, respectively, while RRJ Capital has targeted up to $5 billion.
MBK Partners has reached a first close of $1.25 billion for its third North Asia-focused buyout fund, which has a full target of $2.25 billion. Affinity is looking to raise $3.5 billion for its fourth fund.
Two PE firms have already completed fundraising. PAG reached a final close of $2.5 billion on its debut private equity fund, while Bain Capital secured $2.3 billion for its second Asia vehicle.
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