KKR closes record Asia fund on $6bn

The firm has revealed that it reached a final close on the largest private equity fund ever raised for Asia.

Kohlberg Kravis Roberts has confirmed it made a final close on its $6 billion pan-Asia fund, the largest private equity fund ever raised for the region.

“Having invested more than $5.5 billion in Asia since 2005, we have demonstrated to investors our commitment to the region, as well as the effectiveness of our successful global-local and partnership approach,” said Joseph Bae, member & managing partner of KKR Asia, in a statement.

KKR's Asian Fund II attracted re-ups from 61 percent of LPs invested in Asian Fund I, while 23 percent were new LPs

KKR Asian Fund II was launched in December 2011 and reached a first close in June 2012 on $3 billion, according to the firm.

KKR’s previous pan-Asia vehicle was KKR Asian Fund I, a $4 billion fund with a 2007 vintage, which is fully invested. 

Fund II attracted re-ups from 61 percent of LPs invested in Asian Fund I, while 23 percent were new LPs, according to the firm. The remaining 16 percent are KKR LPs who were not invested in Asian Fund I.

With the new fund, KKR will likely seek more investments in Southeast Asia and Japan and less in China due to slowing GDP growth and a locked IPO market. 

Earlier this year, the firm opened a Singapore office to focus on Southeast Asia investments.

KKR has not made an investment in Japan since 2010, when it acquired recruitment services company Intelligence Holdings. In March this year, it sold the company to Japanese corporate buyer Temp Holdings for ¥68 billion (€526 million; $672 million), reaping an exit multiple of 5x, Private Equity International reported earlier. 

Other pan-regional funds currently in market include vehicles from Affinity Equity Partners and TPG, both targeting $3.5 billion. 

Diminishing investor sentiment for Asia has made fundraising difficult for many firms. In 2012, fundraising totals for Asia plunged 30 percent year-on-year to $31 billion, according to PEI's Research & Analytics division.

During the first half of 2013, the slide continued. Private equity funds in Asia raised $12.4 billion, a 2.3 percent decline from the same period in 2012.  The Asia totals are in sharp contrast to the global first half totals, which were up 30 percent.