KKR attracted $1.1 billion to its inaugural Asia credit fund, which grows a platform that leverages the alternatives giant’s existing $184 billion expertise in global credit.
KKE Asia Credit Opportunities Fund is focused solely on performing privately originated credit investments in Asia Pacific. KKR’s Asia Credit team leverages local and global resources to source, diligence and execute investment opportunities to provide customized financing all the while protecting capital and supporting value creation. The new fund will target three primary investment themes across senior and unitranche corporate lending, subordinated corporate lending and asset-based finance investments.
Hong Kong-based Head of KKR Asia Pacific Ming Lu said that the strategy is complementary to the firm’s equity strategies in the region that continues to benefit from favorable macroeconomic trends and long-term growth. “We believe these dynamics proved an attractive landscape for alternative asset managers like KKR who are able to provide more flexible and differentiated credit solutions than traditional lenders,” he added.
KKR established its credit platform in 2004 and made its first private credit investment in 2005. Globally KKR has $71 billion in private credit and has a team of approximately 170 credit investment professionals across nine cities in seven countries, including approximately 90 private credit investment professionals. KKR Credit has been active in markets including Australia, Greater China, India, Korea, Malaysia, New Zealand, Singapore, and Vietnam.
Since 2019, KKR has closed 14 credit investments in the Asia-Pacific region totaling a transaction value of $4.7 billon. This includes acquisition financing and bespoke capital solutions for companies and financial sponsors in environmental services, real estate, education, infrastructure and healthcare sectors.
“Bank capital represents approximately 80 cents of every dollar of credit capital in Asia, which is a far larger percentage than what we are seeing in North America and Europe,” said Brian Dillard, Head of Asia Credit at KKR, Hong Kong. “There is an imbalance of available financing for Asian businesses at a time when the region’s growth and prosperity have fueled an enormous demand for more flexible funding solutions by borrowers looking to seize the opportunities.”
At the time of the fund’s close it was the largest inaugural pan-regional fund focused on performing credit and one of the largest inaugural pan-regional credit funds to have been raised for Asia Pacific, officials said. KKR investor more than $100 million alongside investors through its balance sheet and employee commitments.