KKR has announced the closing of KKR Global Infrastructure Investors III $7.4 billion fund focused on pursuing global infrastructure investment opportunities with an emphasis on investments in OECD countries.
The company said in a statemnt that itKvwill be investing $358 million in capital alongside external investors through KKR’s balance sheet and employee commitments.
“The current scale of global infrastructure investment demand is simply enormous, and is only growing, with the need outstripping capital available,” said Raj Agrawal, KKR Member and Global Head of KKR’s infrastructure business. “This dynamic, coupled with limited public financing sources, has created a significant need for private capital to provide infrastructure solutions. We believe our sector expertise and global platform uniquely position us to help fill this funding gap and we look forward to our continued growth in, and commitment to, the infrastructure asset class.”
KKR has a risk-based, rather than a sector-based, approach to infrastructure investing. Consistent with this approach, the Fund will focus on critical infrastructure investments with low volatility and strong downside protection where KKR believes it can leverage its global value creation resources to tackle complexity in sourcing, structuring, operations, and execution. By doing so, the Fund aims to deliver attractive returns with a low risk profile from a portfolio that is broadly diversified across a number of different infrastructure sub-sectors, geographies and asset types. The Fund has a broad investment mandate across infrastructure sectors, including but not limited to: energy; transportation; water, wastewater and waste; social infrastructure; and communications infrastructure. The Fund will also focus its investment mandate on the OECD countries predominantly in North America and Western Europe.
KKR first established a dedicated infrastructure team and strategy in 2008. Since then, the team has grown to consist of 25 experienced investment professionals and has completed or announced 25 infrastructure transactions across a number of sub-sectors and geographies. With the closing of the Fund, KKR’s infrastructure business manages approximately $13 billion in assets under management. Recent transactions by the Fund include Starlight, which owns a portfolio of approximately 10,200 telecommunication towers across France, and Discovery Midstream, the largest private natural gas gathering and processing business in Colorado’s Denver-Julesburg Basin.
The Fund received strong backing from a diverse group of new and existing global investors, including public pensions, sovereign wealth funds, insurance companies, family offices, high net worth individual investors and other institutional investors.
“Since first launching the Fund, we were thrilled to see the incredible momentum we received from investors – both those who were early and large supporters of our predecessor funds and also those who were first-time investors with us as well as the asset class,” said Alisa Amarosa Wood, KKR Member and Head of KKR’s Private Market Products Group. “The enthusiasm we saw across all geographies and investor types demonstrates the strong support for our infrastructure team, strategy and investment performance to date. Additionally, we have seen infrastructure as an asset class mature and grow in the way investors allocate capital to the space.
He added that “The support for our Fund also speaks to this evolution of the asset class. We believe this continues to be important as the need for infrastructure capital from an investment perspective only grows.”