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Monday, July 4, 2022
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KKR raises $1.1bln for its first Asia-Pacific credit fund

credit fund

The fund intends to pursue investments primarily in performing, privately originated credit, KKR said

KKR & Co. raised $1.1 billion for its first credit fund focused on investments in the Asia-Pacific region, betting volatility will spark opportunities and deliver returns as high as in the mid-teens.

The new fund, called KKR Asia Credit Opportunities Fund, received financing from new and existing investors, including public and corporate pensions, sovereign wealth funds, commercial banks, insurance companies, asset managers and private investment groups, and family offices, KKR said in a statement.

KKR, which globally manages $184 billion in credits, has already earmarked a third to half of the fund, with three quarters placed in Australia and Southeast Asia, Brian Dillard, said head of Asia credit at the New York-based company.

The firm and its employees contributed more than $100 million to the fund, which is targeting low- to mid-teen returns, he said.

The fund intends to pursue investments primarily in performing, privately originated credit, KKR said. In particular, the fund will broadly target opportunities across three investing themes: senior and unitranche corporate lending, subordinated corporate lending and asset-based finance investments.

The newly closed fund marks another move by KKR to grow its presence in Asia Pacific over the past few years. In 2021, the company closed a $15 billion Asia private equity fund and a $3.9 billion Asia infrastructure fund, among others.

The new credit fund will provide Asian businesses with nonbank financing options, KKR said.

There is an imbalance of available financing for Asian businesses at a time when the region’s growth and prosperity have fuelled an enormous demand for more flexible funding solutions by borrowers looking to seize the opportunities. With limited non-bank supply, we believe this market presents compelling opportunities for alternative credit providers like KKR, Dillard said.

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