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KKR’s $3.9 bn Asia infra fund raises $130 mn from Korea

Jan 11, 2021 (Gmt+09:00)

(Getty Images Bank)

The Korean Teachers’ Credit Union (KTCU) and financial services firms in South Korea have committed $130 million to KKR & Co.’s inaugural Asia infrastructure fund that raised $3.9 billion in its final close.

KTCU has poured $70 million into the latest fund, accounting for the biggest chunk of the Korean investment, according to sources with direct knowledge of the fundraising on Jan. 11. Other Korean limited partners in the KKR fund include Kookmin Bank, Meritz Securities, Co. and Orange Life Insurance Co.

The US investment firm announced the final close of KKR Asia Pacific Infrastructure Investors on Sunday, marking the largest Asia-focused infrastructure fund raised so far. KKR injected approximately $300 million into the new fund through its balance sheet and employee commitments.

From other countries, Singapore’s GIC, Teacher Retirement System of Texas and Canada’s Alberta Investment Management Corporation also participated in the infrastructure fund, the sources added.

“We believe that the Asia Pacific contains some of the most favorable macroeconomic dynamics in the world, and that the region is expected to account for more than half of the world’s economic growth in the coming years,” KKR Asia Pacific head Ming Lu said in a statement.

“However, the demand to develop or upgrade critical infrastructure assets outpaces the available public funding in many markets. Private capital is playing an increasingly important role to fill the gap in the region,” he added.

The fund will focus on critical infrastructure with low volatility and strong downside protection, while pursuing higher risk-adjusted returns.

The fundraising campaign overlapped with that of KKR’s Asia real estate fund in Korea, deterring many other institutions from participating in the infrastructure fund because of their exposure limits. Orange Life made the capital commitment before it was absorbed into Shinhan Life Insurance Co. late last month.

Since KKR established its first global infrastructure team in 2008, it has deployed more than $24 billion across approximately 40 infrastructure investments.

In Asia, KKR has committed $1.8 billion across six investments since 2019. Its Asia infrastructure portfolio includes India Grid Trust, India’s No. 1 infrastructure investment trust; Virescent Infrastructure, a renewable energy company in India; Eco Solutions Group, a leading environmental services provider in South Korea; TSK Corporation, an environmental services management company in South Korea; First Gen, a top Philippines power producer; and Pinnacle Towers, a leading telecommunications infrastructure provider in the Philippines.

In the July-September quarter of last year, KKR joined the pool of 54 global real estate investment managers of the National Pension Service.

Write to Jun-ho Cha at chacha@hankyung.com

Yseonhee Kim edited this article.

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