KKR's new Asia-focused fund targets record US$15b in 2020: sources

[HONG KONG] Global private equity group KKR & Co is targeting a record US$15 billion for a new Asia-focused buyout fund, three sources with knowledge of the plan told Reuters.

Buyout groups including Bain Capital, Blackstone, Carlyle, and KKR are increasingly focusing on Asian investments as lower valuations and corporate restructuring throw up new opportunities in key markets.

KKR's fundraising will start in the first quarter of 2020, with the aim of achieving first close, an important milestone indicating the fund has crossed a minimum threshold and can begin making investments, by June, the people said on Thursday.

A spokeswoman for KKR in Hong Kong declined to comment.

The fundraising target and timeline for KKR's planned Asia-focused fund, which will focus on consumer, technology, and manufacturing firms across major markets including Australia, China, Japan, and India, have not previously been reported.

These are countries where it has done large deals in the last few years, including its acquisition of Campbell Soup's Australian snacks unit for US$2.2 billion in July and Japanese car parts maker and KKR-owned Calsonic Kansei's purchase of Fiat Chrysler's Magneti Marelli for US$7.1 billion.

KKR has already received interest for its planned fund from prospective investors, known as limited partners (LPs), including those who invested in its previous Asia funds, two of the people said.

The fund size and fundraising schedule have not yet formalised and the plan is subject to change, said the people, who did not want to be named as the details are not public yet.

REGIONAL RECORD

An Asian fund of the size KKR is targeting would be the biggest raised by the New York-based firm, whose previous record was US$9.3 billion in 2017. It would also be the biggest US dollar-denominated private equity capital raising in the region.

Hillhouse Capital, an investor in top Chinese technology firms including Tencent and Baidu, last year raised a record US$10.6 billion Asian fund.

A total of 92 funds have raised a combined US$42.3 billion in US dollar-denominated Asia funds so far this year, compared to US$50 billion raised in the whole of 2018, Preqin data shows.

KKR is also raising capital for investments elsewhere and on Tuesday said it had closed its latest buyout fund European Fund V, focused on transactions in core Western Europe markets, at 5.8 billion euros (S$8.7 billion).

REUTERS