KKR & Co raises $9.3 billion for third Asia fund

Global private equity firm KKR & Co has raised $9.3 billion, the biggest ever mobilisation with investment focus in Asia. In the first ever fund in 2007, the company had raised $4 billion, followed by $6 billion in 2013. Both these funds were deployed across Japan, China and India, besides other countries in South Asia and Pacific region.

The company plans to invest in emerging opportunities with rising consumption on the back of urbanisation.  Sanjay Nayar, member and chief executive of KKR India, said, "This is an exciting time for investment given India’s macroeconomic environment and constructive government initiatives, besides rising consumption and urbanisation."

KKR had set up its office in India in 2009. Since then, it has deployed $4 billion in private equity investments and a similar amount across its credit businesses.  In March this year, the global private equity giant, along with Canada Pension Plan Investment Board, invested $952 million in telecom company Bharti Infratel. KKR is eyeing such large deals in India.

“The closing of our Asian Fund III furthers KKR’s commitment to India and gives us an even greater opportunity to assist market-leading businesses in their growth,” said Nayar. 

The company’s other recent investments include $265 million in SBI Life, along with Temasek, about $210 million in Avantha Holdings and $155 million in TVS Logistics Service, with CDPQ.

KKR’s success has been unique in India, primarily its investments in the manufacturing companies. 

In March last year, it sold its controlling stake in off-highway tyre maker Alliance Tire Group to Japan’s Yokohama Rubber for $1.05 billion. This gave it a return of 2.8 times for an investment made in April 2013.

In August, when Shanghai Fosun Pharmaceutical bought 86 per cent in Hyderabad-based Gland Pharma for $1.26 billion, it gave KKR 2.67 times return on a $231-million investment made 30 months ago. 

These deals have helped KKR make returns over $3 billion from India.

These returns have helped KKR generate an internal rate of return of 20.6 per cent for its second Asia fund as of March 31, and helped it to raise the largest fund dedicated to the region.