KKR secures US$2.5 billion for second Asia private credit fund
The Asia Credit Opportunities Fund II final close includes US$700 million from separately managed accounts
[HONG KONG] KKR closed its second Asia-focused credit fund late December, securing US$2.5 billion in total investments, according to people familiar with the matter.
The Asia Credit Opportunities Fund II final close includes US$700 million from separately managed accounts, the people said, who asked not to be identified discussing private matters. The vehicle is a performing credit fund designed to deploy capital into deals targeting returns in the low-to-mid-teens, Bloomberg News reported in November.
A representative for KKR declined to comment.
Global asset managers have been vying for a slice of Asia’s private credit market, which remains a fraction of the US$1.7 trillion global private debt industry. The asset class in the region is projected to grow to US$92 billion by 2027 from US$59 billion in 2024, driven by investor appetite for higher yields and diversification, according to an industry report.
Still, private credit faces stiff competition from traditional lenders. Asian borrowers are highly price-sensitive, often opting for bank loans that are typically 200 to 400 basis points cheaper than private debt.
Financial institutions also provide services such as cash management, revolving credit lines and transaction banking – offerings that private debt firms struggle to match.
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As of September, KKR managed US$315 billion in credit assets globally including liquid strategies, according to its website. The New York-based firm has been expanding its private debt footprint in Asia, hiring its first Japan credit specialist last year and completing deals in Australia and India.
In 2022, KKR raised US$1.1 billion for its inaugural Asia-Pacific credit fund, with more than half of the capital coming from the region. BLOOMBERG
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