KKR Said to Mull Record $9 Billion Target for Third Asia Fundby
New pool would be 50 percent larger than 2013 predecessor
KKR's Nuttall spoke of importance of region to firm's future
KKR & Co., the alternative asset manager co-founded by Henry Kravis and George Roberts, is considering a record $9 billion target for its third Asia-dedicated buyout fund, said people familiar with the matter.
The firm is in early talks with investors about raising the pool in 2017, said the people, who asked not be identified because the information is private. The target figure is predicated on the strong deal flow KKR executives believe is likely to materialize in the region over the next five years.
KKR’s senior management has made statements about Asia as a key driver of returns. “In Asia, while we’re a bit cautious given the volatility, we are seeing opportunity come out of the volatility,” Scott Nuttall, head of global capital and asset management at KKR, said on a call with investors and analysts in February. “I’d point you to places like Japan, where we’ve done some corporate carve-outs and think there is more to do there. Chinese services is a theme we like a lot.”
The new pool, should it reach its target, would be the largest Asia-dedicated buyout fund raised, surpassing New York-based KKR’s second fund for the region, which closed in 2013 at $6 billion, according to data compiled by Bloomberg.
As of Dec. 31, the 2013 fund was generating a gross return of more than 35 percent, Nutall said on the call. A fund generating more than 25 percent is considered to be a top quartile performer. The second fund, in which KKR has invested about $2.8 billion, includes stakes in CA Media and Indian investment bank Avendus Capital, according to the company’s website and data compiled by Bloomberg.
A spokeswoman for KKR declined to comment.