KKR closed its latest infrastructure offering at $17 billion with an emphasis on investments in OECD countries in North America and Western Europe.
The KKR Global Infrastructure Investors IV fund is slated to focus on critical infrastructure investments with low volatility and strong downside protection where KKR said it believes it can achieve attractive risk-adjusted returns by leveraging its experienced team, risk-based strategy, long track record of operational value creation and a global network of industry experts.
“Global demand for building and upgrading critical infrastructure, as well as supporting responsible energy transition and growing broadband access, requires funding far in excess of public sources, which provides a big opportunity for private capital,” said Brandon Freiman, head of North American Infrastructure at KKR.
The firm’s global infrastructure strategy launched in 2008 and has since grown to $40 billion in assets with a team of 75 dedicated investment professionals. KKR has made approximately 65 infrastructure investments across a range of sub-sectors and geographies.
KKR will be investing $1 billion of capital in the fund alongside these investors through the Firm’s balance sheet, affiliates, and employee commitments. The fund received strong support from a wide range of investors including public and private pension plans, sovereign wealth funds, insurance companies, endowments and foundations, private wealth platforms, family offices and high-net-worth individual investors.
“At more than double the size of its predecessor, the success of KKR Global Infrastructure Investors IV speaks to the robust opportunities that we see in this asset class and to the confidence that our investors continue to place in our infrastructure team and our ability to deliver compelling risk-adjusted returns across a variety of market conditions,” said Alisa Amarosa Wood, Global Head of Private Markets and Real Assets Product Strategies at KKR.
According to KKR, the fund closing comes at a time of significant growth in demand for private infrastructure investment, particularly in sectors including digital communications, energy transition, transportation, water, waste, and industrial infrastructure, among others. Supporting projected levels of GDP growth will require $3.7 trillion of annual investment in global infrastructure between 2017 and 2035, which could increase by an additional $1 trillion annually to meet the United Nations’ sustainable development goals, according to the McKinsey Global Institute.
Some of the recent KKR investments include: Refresco, a global independent beverage manufacturer; CyrusOne, a premier global data center infrastructure provider; Ocean Yield, a European-based maritime leasing company; and Atlantic Aviation, a fixed-base operator of private aviation terminals and infrastructure assets across North America.