KKR plans investment expansion for insurance unit in India
The investment firm insurance business is anchored through Global Atlantic Financial Group
[MUMBAI] KKR is planning a bigger role for its India insurance unit, as the investment firm expands in credit, infrastructure and private equity in the country, its top executives said.
“We are funding transactions in India through our insurance company,” KKR’s global co-chief executive officer Scott C Nuttall said in a media briefing in Mumbai. “We are also thinking through whether it could make sense to have local partnerships with Indian insurance companies where they create the liabilities and we help them invest the assets alongside.”
KKR’s insurance business is anchored through Global Atlantic Financial Group, which the firm fully acquired in January last year. This unit made its first investment in India when KKR financed Manipal Group with US$600 million in June, Nuttall said. Besides India, the US-based insurance business is also expanding in Europe and Japan, Nuttall added.
Global Atlantic’s adjusted investible assets stood at US$197 billion, according to a presentation in September.
KKR’s insurance business gives the firm “a competitive and scalable pool of capital that extends even to emerging markets such as India”, said Gaurav Trehan, KKR’s co-head for Asia-Pacific and head of Asia-Pacific Private Equity.
While Global Atlantic represents KKR’s insurance-driven capital deployment, the firm also invests through pooled vehicles backed by third-party investors. Its last Asian private equity fund closed at US$15 billion in April 2021.
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Private credit boost
KKR has invested US$9 billion in equity in India since 2020, spanning private equity and infrastructure asset classes. KKR’s credit business has been its “newest and fastest evolving”, Trehan said.
India and Japan are KKR’s best-performing markets in Asia with the strongest returns, Nuttal said, without providing specific figures.
The company will expand in sectors including health care, consumer, technology and financial services, Nuttall said. It will also invest in infrastructure, including renewables, roads, transmission grids and data centres, he added.
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The company is looking to “go big into manufacturing”, Trehan added. Funding in these segments won’t always be through equity, Nuttall said.
“Part of the value of having a credit platform, especially when linked to an insurance business, is the ability to provide companies in India with lower-cost capital,” Nuttall said.
“India is still largely a bank-lending market. There’s no developed leveraged loan or traded high-yield market,” he said, highlighting the opportunities for the firm.
Global plans
Globally, KKR will invest between US$90 billion to US$100 billion in 2025. It expects its India portfolio to “increasingly resemble the firm’s global profile over time”, Nuttall said.
KKR manages about US$685 billion, with credit representing its largest segment at US$250 billion to US$300 billion, he added.
For KKR, this is a renewed push into credit in India after it suffered losses back in 2021, which forced the asset manager to retreat. The firm learned from its “mistakes”, Trehan said, adding that the team has been restructured.
Meanwhile, KKR is exploring ways to step up its presence in India real estate, as it talks with developers on how to expand “beyond just providing capital, equity or debt”, Trehan said.
The firm said in 2023 that it was winding down its real estate debt financing unit in India and would invest in the sector through equity.
Rupee financing
KKR will shift to local financing for rupee investments once the Reserve Bank of India’s plan allowing domestic banks to provide acquisition financing takes effect, Trehan said. The firm will still raise dollar debt for companies which have dollar revenue, he added.
For Indian buyouts, KKR has typically financed them with equity capital from its own funds and US dollar debt offshore, “which is not a great place to be”, Trehan said. BLOOMBERG
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