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Hardik Shah, MD and head of India infra, KKR India. MINT
Hardik Shah, MD and head of India infra, KKR India. MINT

KKR raises $3.9 billion for APAC infra fund

  • KKR’s Asia infra fund will look to create a diversified portfolio of core infrastructure assets

KKR has hit the final close of its $3.9 billion maiden infrastructure fund for Asia, KKR Asia Pacific Infrastructure Investors SCSp, the American private equity investor said on Monday.

As part of its dedicated Asia Pacific infrastructure strategy, launched in 2019, KKR has so far committed $1.8 billion across six investments. KKR’s Asia Pacific infrastructure portfolio includes India Grid Trust, a publicly traded infrastructure investment trust, Virescent Infrastructure, a renewable energy company in India, Eco Solutions Group, an environmental services provider in South Korea, First Gen, a Philippines power producer, TSK Corp, an environmental services management company in South Korea, and Pinnacle Towers, a telecommunications infrastructure provider in the Philippines.

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The India Grid investment in mid-2019 was the first investment by the fund.

“We think Asia Pacific infrastructure is a major opportunity for KKR, which already had a large private markets business in Asia, while our global infrastructure business was largely focused on the US and Europe. We started raising the fund in mid 2019 and in our first attempt we have raised the largest corpus for such a strategy. The LP response has been phenomenal," said Hardik Shah, managing director and head of India infra, KKR India.

The fund will invest in India, South Korea, South East Asia, Japan, China, and Australia, Shah said. India is a key market for this fund, though it doesn’t have hard geographic allocations, he said.

KKR’s Asia infrastructure fund will look to create a diversified portfolio of core infrastructure assets, which generate annuity cash flows.

“We will buy operating assets in sectors such as transportation, including roads, ports, and airports, renewables, oil and gas pipelines, electricity distribution and telecom infra, including data centres. Roads and telecom infrastructure are of keen interest to us. There is a lot of depth in the roads sector and it is a sector that we like. We will look at both annuity and toll roads," Shah said.

The firm is also eyeing opportunities arising out of government programmes. “We see a massive opportunity in the Indian government’s National Infrastructure Pipeline. We believe that a lot of capital for this will come from foreign investors," he said.

“Globally, infrastructure assets are in high demand and the case is similar in India. So, the competition has definitely increased. Some sectors have their own cycles such as renewables, which appears to be hot right now, but we believe that India is a deep infrastructure market...we don’t think things are overpriced right now and we see a number of attractive opportunities," Shah said.

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