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KKR to list its first investment vehicle in Australia in November: sources
[SYDNEY] KKR & Co Inc is preparing to list a A$500 million (S$473.6 million) credit fund in November in Australia, marking the US buyout firm's first investment vehicle in the country, two people with direct knowledge of the matter told Reuters.
The KKR Credit Income Fund is aimed at investor demand for higher-yielding products amid falling global interest rates, offering target annual dividend payments of 4 per cent to 6 per cent, the people said, declining to identified because they were not allowed to speak with media.
A KKR spokesman declined to comment on plans to list a credit fund on the Australian Securities Exchange, but said the firm was watching the "interesting space".
Proceeds would be invested in KKR's existing San Francisco-based Global Credit Opportunities Fund and "over time" would also be used to invest in its European Loan fund, the people said.
Brokers briefed on the plan this week expected the fund to be well received, given Australia's central bank has lowered its cash rate to a record 1 per cent, and financial futures are pricing in two further cuts by mid-2020, putting further pressure on bank deposits, said one of the people, who attended KKR presentations.
"Deposit rates have gone too low and investors need more income to live off, so a lot of them are looking for higher income levels than what the banks are offering in the market," the person said.
The fund would charge 88 basis points in fees to pay for the cost of listing, which is estimated at about 2.5 per cent of the funds raised, the people added.
KKR and its joint venture partners also plan to list their South-east Asian online realtor PropertyGuru Group on the Australian Securities Exchange later this year, people with direct knowledge of the deal said told Reuters on Tuesday.