KKR has officially launched its maiden Asia infrastructure strategy, drawing USD 1.5bn of commitments, according to a source close to the matter.
The Luxembourg-registered fund, which launched on 15 November, is targeting a raise of approximately USD 3bn, which is higher than the USD 1.5bn-USD 2bn aim that the market had previously anticipated, the source said. The fund will seek opportunities in the Asia-Pacific region, focusing on core-plus assets in developed Asian markets and core assets in developing nations, according to the source and another source close.
The second source said KKR sees a number of potential infrastructure investment opportunities in the region, citing India, South Korea, the Philippines, Japan and other areas in Southeast Asia as investment destinations. It will also consider opportunistic investments in China and Australia.
The new Asia strategy, alongside Singapore’s GIC, made its first investment in Mumbai-headquartered IndiGrid in May. Once a follow-on 15% acquisition completes, the two will collectively own 57% of IndiGrid. Previously, KKR acquired a 10.3% stake in India-based telecom company, Bharti Airtel, in 2017, together with CPPIB through its Global Infrastructure Investors fund II.
The second source said the infrastructure mandate will seek out proprietary opportunities, rather than participation in auction processes. The fund views Asia as a favourable environment for infrastructure investment, driven by demographic changes across the region and growing appetite among institutional investors who seek opportunity to co-invest in the Asian market.
In Asia, KKR has eight offices – in Beijing, Hong Kong, Mumbai, Seoul, Shanghai, Singapore, Sydney and Tokyo. The firm has been scaling up its manpower in the region, starting with the appointment of David Luboff as member and head of Asia Pacific infrastructure in January 2019.