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KKR and Korea's NPS team up for Colonial US pipeline investment

  • Christina Kautzky
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Kohlberg Kravis Roberts & Co. (KKR) has joined forces with Korea’s National Pension Service (NPS) to take a 23.44% stake in Alpharetta, GA-headquartered Colonial Pipeline Company, in a deal said to be worth about KRW1 trillion ($895 million).

The move marks a major focus on energy and infrastructure assets by the NPS, but more significantly showcases its desire to diversify its investment portfolio.

The world’s fourth largest pension fund appointed Jun Kwang-woo Chairman and CEO recently, and since then has seen a dramatic increase in its appetite for alternatives investing. He said publicly of the Colonial deal, “We are undertaking this investment with KKR because it fits well with our efforts” both to diversify its portfolio and to seek “long-term, stable returns” to match the needs of its beneficiaries.

KKR’s head of energy and infrastructure explained that the appeal of Colonial was its “experienced management team with a stellar operational track record” and history of “stable earnings.” Colonial is the largest petroleum products pipeline in North America, with supply centers in the Gulf of Mexico running a variety of fuels to customers along the Eastern seaboard of the US.

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