KKR has raised $1.1bn for its first ever Asian credit fund, making it one of the biggest fixed income fund launches in the region.
The Asia Credit Opportunities fund, which has now closed, saw backing from new and existing investors, including pension funds, sovereign wealth funds, commercial banks, insurers, asset managers and family offices, KKR said.
Investors are increasingly seeking out alternative investments, with income strategies particularly popular in the high inflation environment. The fund will invest in a blend of private credit, customised financing and asset-backed securities.
KKR head of Asia credit Brian Dillard 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 opportunities.’
KKR invested more than $100 million alongside external investors through its balance sheet and employee commitments.
Ming Lu, head of KKR Asia Pacific said that the firm’s credit strategy is complementary to its existing equity strategies in Asia. He said the region continues to benefit from favourable macro-economic and long term growth.
‘However, the number of financing options available to companies looking to keep pace with this rapid growth has remained limited. We believe these dynamics provide an attractive landscape for alternative asset managers like KKR who are able to provide more flexible and differentiated credit solutions than traditional lenders,’ Lu added.
KKR has closed 14 credit investments in Asia-Pacific since 2019, accounting for approximately $2.4bn and a total transaction value of $4.7bn. This has included providing acquisition financing and bespoke capital arrangements for companies and financial sponsors in the environmental services, real estate, education, infrastructure, and healthcare sectors.
The firm manages around $184bn in credit assets globally, including $102bn in leveraged credit, $71bn in private credit and $10bn in strategic investments.