KKR raises $6.4 billion for biggest Asia Pacific infrastructure fund

By Nilutpal Timsina and Yantoultra Ngui

(Reuters) -Global investment firm KKR & Co said on Wednesday it had raised $6.4 billion for its fund focused on infrastructure and energy related investments across the fast-growing Asia Pacific region.

New York-based KKR said the fund was the largest pan-regional infrastructure fund to have been raised for Asia Pacific.

"As Asia accounts for more than 60% of global growth, driven by rising domestic consumption and productivity, rapid urbanization, and an enormous emerging middle class, the need for new infrastructure and sustainable energy sources will continue to accelerate," said Hardik Shah, a partner at KKR's Infrastructure team based in Mumbai, in the statement.

KKR said the fund received strong backing from new and existing global investors including public and corporate pensions, sovereign wealth funds, insurance companies, endowment funds, and asset managers.

The fund's mandate covers sectors including renewables, power and utilities, water and wastewater, digital infrastructure, and transportation, according to KKR.

It added that it had already invested or committed more than half of its capital from the fund across some 10 investments.

Among KKR's recent deal activities are the acquisition of a 20% stake in Singapore Telecommunications' regional data centre business for S$1.1 billion ($821.57 million) and investment of $400 million in Malaysian subsea telecommunications cable services provider OMS Group.

KKR and South Korea's Taeyoung Group are planning to sell their joint venture Ecorbit in a deal that could value the environment company at more than $2 billion, Reuters reported on Tuesday, citing people with knowledge of the matter.

KKR's deal activities added to the hectic pace of mergers and acquisitions in the infrastructure and energy space globally in recent years, with soaring demand making the asset class increasingly popular.

On Jan. 12, BlackRock announced it would buy Global Infrastructure Partners for $12.5 billion to expand further in the infrastructure space. Days later, U.S. private equity firm General Atlantic said it agreed to a deal to buy UK-based infrastructure investor Actis.

KKR first established its global infrastructure team and strategy in 2008 and now manages some $56 billion in assets under management across more than 80 infrastructure investments globally.

In Asia Pacific, KKR has organically grown to some $13 billion in assets under management since its inception in 2019, according to the statement.

In 2021, KKR raised $3.9 billion in its inaugural Asia Pacific-dedicated infrastructure fund, KKR Asia Pacific Infrastructure Investors SCSp, which was the largest Asia dedicated pan regional fund at the time.

"Infrastructure is a key pillar of KKR's global and regional strategy," said David Luboff, Co-Head of KKR Asia Pacific and Head of Asia Pacific Infrastructure at KKR.

U.S. law firm Debevoise & Plimpton represented KKR as primary fund counsel for the fundraise, the statement showed.

($1 = 1.3389 Singapore dollars)

(Reporting by Nilutpal Timsina in Bengaluru and Yantoultra Ngui in Singapore; Editing by Rashmi Aich, Lincoln Feast and Michael Perry)