KKR closes Asia's largest credit fund at $1.1 bn

KKR & Co. on Wednesday announced the final close of its first Asia credit fund at $1.1 billion, the largest such fund focused on Asia.

The private equity firm said that it will play a larger role in meeting unmatched demand for private credit in Asia, where it sees an imbalance of available financing despite the region’s economic growth.

The credit investment fund, dubbed KKR Asia Credit Opportunities Fund (ACOF), will differentiate itself from those of traditional lenders with more flexible and customized funding options.

Banks represent about 80% of credit capital provided in Asia in dollar terms, a far larger percentage than in North America and Europe. But there are not enough non-bank credit providers in the region, KKR states.

“With limited non-bank supply, we believe this market presents compelling opportunities for alternative credit providers like KKR,” Brian Dillard, KKR’s Asia credit head, said in a statement.

KKR invested over $100 million in the fund through its balance sheet and employee commitments.

“ACOF intends to pursue investments primarily in performing privately originated credit and broadly target opportunities … including senior and unitranche corporate lending, subordinated corporate lending and asset-based finance investments.”

In Asia, KKR has closed 14 credit investments since 2019, amounting to around $2.4 billion in investment by KKR for a total transaction value of $4.7 billion. The investments included acquisition financing and bespoke credit loans for various sectors from real estate, education and infrastructure to healthcare.

KKR’s credit platform, established in 2004, has been active in Australia, China, India, Korea, Malaysia, New Zealand, Singapore and Vietnam.

The US private equity firm manages approximately $184 billion of credit assets globally as of end-March, which largely breaks down into $102 billion in leveraged credit; $71 billion in private credit; and $10 billion in strategic investments.

Write to Jun-Ho Cha at chacha@hankyung.com
Yeonhee Kim edited this article