• Firm plans to raise money for local fund starting next quarter
  • Office in Mexico City would be 22nd in the world for KKR

KKR & Co., the New York-based private equity firm, is planning to open in office in Mexico City as it seeks to start a local fund, according to a person familiar with the matter.

An executive search firm is building a list of potential candidates to head the office, said the person, who asked not to be identified because the plan is private. Opening the office is contingent on raising money for a local fund, an effort originally planned for December that has been pushed back to next quarter, the person said.

The latest move by KKR, which oversees $126.4 billion of assets, comes amid a wave of interest in Mexico from private-equity firms seeking to profit from constitutional changes that opened up the energy and telecommunications industries as well as the creation of new financial instruments designed to stoke investment. While Brazil struggles through its worst recession in a century and political turmoil, some asset managers are seeking opportunities in Mexico, where gross domestic product is forecast to expand for a seventh year.

Kristi Huller, a spokeswoman for KKR, declined to comment on the firm’s plans for Mexico.

In a filing with Mexican authorities in November, KKR said Mexican growth will accelerate following the legal changes. The filing referred to a fundraising effort of at least $500 million.

The Mexico City office would oversee that fund, which would focus on deals that are deemed too small -- less than $100 million -- or otherwise inappropriate for KKR’s flagship regional fund, the KKR North America Fund XI, according to an investor presentation included in one of the private-equity firm’s Mexican filings.

An opening in Mexico this year would mark KKR’s 22nd office globally, according to an offering document posted on the Mexican stock exchange website. Luis Tellez, who formerly headed the Mexican stock exchange, joined KKR as a senior adviser in 2015.

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