KKR amasses more than $13bn for record Asia fund

KKR has raised more than $13 billion for the world’s largest Asia-focused private equity fund.

The New York-headquartered firm has secured at least $13.1 billion of total commitments across KKR Asian Fund IV and its parallel funds from 260 investors, according to a filing with the US Securities and Exchange Commission on Thursday. KKR was reportedly targeting $12.5 billion for the fund.

Limited partners include the California Public Employees’ Retirement System, Minnesota State Board of Investment and Taiwan’s Cathay Life Insurance, according to PEI data. KKR’s GP commitment was 9.3 percent of the $10.7 billion raised for Fund IV as of 30 June, according to its Q2 earnings statement.

Fund IV, which has been in market since March and was still fundraising as of last Thursday, is already 40 percent larger than KKR Asian Fund III, a $9.3 billion 2017-vintage. That fund had $4.2 billion of uncalled commitments as of 30 June.

KKR declined to comment.

At $13.1 billion, KKR has beaten the Asian private equity fundraising record set by Hong Kong-headquartered Hillhouse Capital, which collected $10.6 billion for its 2018-vintage Fund IV. Hillhouse is seeking $13 billion for its fifth fundraising programme, sister publication Buyouts reported in March.

KKR’s dominant fundraise could be symptomatic of a flight to quality during the pandemic. Silver Lake, CVC Capital Partners and Ardian have each closed mega-funds this year, while Clayton, Dubilier & Rice, Thoma Bravo and EQT are in market with vehicles.

The private equity giant believes its Asia franchise could become as large as North America. Of all the “significant growth opportunities” KKR has ahead, “maybe our biggest is in Asia”, chief financial officer Rob Lewin said on a 4 August earnings call. Its Asia assets under management rose almost 60 percent to $30 billion in the year to 30 June.

KKR has deployed large sums of capital in the region this year, including 55.5 billion rupees ($759 million; €647 million) into India’s Reliance Retail Ventures last month. That deal followed a 113.7 billion rupees investment into telecom network Reliance Jio Platforms in May – a record for its Asia private equity business – as well as major transactions in Vietnam, Australia and the Philippines.

“We noticed that, compared to previous negotiations, companies are much more willing to sell during the pandemic because of the uncertainties around how long the impact will last and whether negotiations will lead to a sale,” Ming Lu, head of Asia-Pacific at KKR, told PEI in June.

“We observed a number of sellers running into liquidity issues during the pandemic, and, in some cases, the family groups were facing defaults on certain debts that weren’t related to the business we’re buying. That made them say: ‘We want to get it done’.”