Expanding in Asia
KKR & Co. L.P. (KKR) has raised two dedicated funds for the Asia-Pacific Region. Its second Asia fund includes a performance hurdle rate of 7% return on investment prior to receiving its share of the fund gains.
KKR has raised more than $6 billion for the second fund to be invested in the Asian region. The timing and the hurdle rate enabled it to get higher commitments compared to other funds operating in the region.
KKR is making investments in China, India, Vietnam, Taiwan, Indonesia, Malaysia, Singapore, Australia, Japan, and South Korea. The company has increased its focus on the Asian region due to great growth potential and positive demographics opportunities.
Major investments in Asia
A few of KKR’s major investments in China include Asia Dairy, China Cord Blood Corporation, China International Capital Corporation Limited, COFCO Meat, and Far East Horizon. Major investments in India include Bharti Infratel Ltd., Coffee Day Resorts, Dalmia Cement, Gland Pharma Limited, and Magma Fincorp.
KKR is strengthening its team in the Asian region by hiring managing directors from other private equity firms such as Leafgreen Capital Partners. The company is also expanding its credit and special situations initiatives divisions in Indonesia, Malaysia, Singapore, and India. The expansion is mainly due to relatively higher interest rates, nascent market of credit, and immense development opportunities.
Alternative asset managers such as The Blackstone Group (BX), The Carlyle Group (CG), Apollo Global Management (APO), and asset managers that form part of the Financial Select Sector SPDR Fund (XLF) have also expanded their operations in Asia and are looking to take advantage of the favorable macro factors.