KKR raises $1.1b for debut Asia credit fund
KKR has closed its debut Asia credit fund with USD 1.1bn in commitments, completing the set of vehicles dedicated to the region across its main strategies.
In the past 18 months, the firm closed its fourth Asia private equity fund on USD 15bn and raised USD 3.9bn and USD 1.7bn, respectively, for its latest regional infrastructure and real estate vehicles. It was confirmed in February that an Asia growth-stage fund would launch this year.
KKR claims the credit fund is one of the largest focused on performing credit in the region. LPs include public and corporate pensions, sovereign wealth funds, commercial banks, insurance companies, asset managers and private investment groups, and family offices. The private equity firm also contributed more than USD 100m in balance sheet and employee commitments.
KKR has closed 14 credit investments in Asia since 2019, deploying approximately USD 2.4bn. It has provided acquisition financing and bespoke capital solutions for companies and financial sponsors across environmental services, real estate, education, infrastructure, and healthcare. Target markets include Australia, Greater China, India, Korea, Malaysia, New Zealand, Singapore, and Vietnam.
The new fund will pursue investments primarily in performing privately originated credit. There are three key themes: senior and unitranche corporate lending, subordinated corporate lending, and asset-based finance investments.
“Bank capital represents approximately 80 cents of every dollar of credit capital in Asia, which is a far larger percentage than what we are seeing in North America and Europe. There is an imbalance of available financing for Asian businesses at a time when the region’s growth and prosperity have fuelled an enormous demand for more flexible funding solutions by borrowers looking to seize the opportunities,” said Brian Dillard, head of Asia credit at KKR, in a statement.
“With limited non-bank supply, we believe this market presents compelling opportunities for alternative credit providers like KKR.”
More global private equity firms – as well as some of the larger regional managers – are looking to roll out credit strategies in Asia. Having the ability to take advantage of opportunities where the target company is reluctant to take equity funding and filling the gap left by banks that are withdrawing from direct lending are commonly cited driving factors.
KKR established its global credit platform in 2004. Today, it manages approximately USD 184bn in credit assets globally, including USD 102bn in leveraged credit, USD 71bn in private credit, and USD 10bn in strategic investments. The firm has around 90 private credit investment professionals.
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