Kohlberg Kravis Roberts & Co is raising $4 billion for its first Asia buyout fund from which billion dollar deals can be expected, and its largest investor, Washington State Investment Board, has reportedly made a preliminary $500 million pledge.
The fund will target buyouts in Japan, Greater China, Australia, New Zealand and India and neighbouring countries. Separately, KKR has reportedly raised $16.1 billion for a new US fund, and is expected to reach its $16.6 billion cap.
James Greene Jr, a member of KKR, was quoted on Bloomberg as having told the Washington pension board’s private markets committee in Olympia: “We really look upon Asia as a very compelling opportunity for private equity; it’s really the fastest growing region in the global economy.”
KKR has made waves across Asia in the past 18 months despite having entered the region later than other US private equity names like The Carlyle Group, Warburg Pincus and Texas Pacific Group. In its most recent deal, KKR partnered Australia’s Seven Network to form a joint venture that values the media group’s business at $3 billion. The deal is KKR’s second this year in Australia out of three publicised buyout attempts including the Coles Myer takeover attempt.
Thomas Ruggels, senior investment officer for private equity for Washington was quoted by Bloomberg as saying: “Even though they haven’t done a lot of investing in Asia, the brand name is pretty strong in Asia. They’ve put together an impressive team of senior Asian executives to manage this fund.”
Washington had 1.8 percent of its private equity assets invested in Asia as of 30 June, according to Ruggels.
Washington State, according to the news report, was divided between committing $600 million, and the lower $500 million recommendation. The full board, according to Bloomberg, is scheduled to vote later in January.