KKR aims to raise US$15 billion in new Asia private equity fund, Reuters sources say

Kohlberg Kravis Roberts & Co. has agreed to acquire Arctos Partners, granting the firm minority ownership in some of the most storied franchises across all professional team sports. (AP Photo/Richard Drew)

KKR has kicked off fundraising for its fifth Asia private equity fund, seeking to raise US$15 billion in what would be one of the region’s largest buyout fundraisings, three people with knowledge of the matter said.

The global private equity firm started marketing the fund to investors this week, said the sources, who all declined to be named as the information was confidential.

The final size of the new fund could exceed the target based on the market response, the sources added. It will continue to focus on sectors including consumer, life sciences, financial services, healthcare and industrials, said one of the sources.

KKR declined to comment.

Activity picks up

Private equity activity has picked up in Asia as warming capital markets allow exits via initial public offerings to take place while assets in markets such as Japan and India have become more attractive to investors.

The total amount of capital returned to investors from KKR’s Asia private equity investments has exceeded $7.3 billion this year, Reuters reported earlier this month.

Half of the private equity capital that would be returned to investors this year would come from Asia, the global investment firm’s co-CEO Joe Bae said at a Hong Kong summit earlier this month.

KKR raised $15 billion in its fourth Asia buyout fund in 2021, the largest such fund to date.

Its third and fourth Asia funds achieved a gross internal rate of return of over 20 per cent, KKR said on its recent earnings call. The fourth fund had returned 40 per cent of its capital by the end of September.

Reaping returns

Most recently, KKR sold a 19.9 per cent stake in Japanese transport and logistics firm LOGISTEED to Japan Post for about 142 billion yen, public filings showed.

It has also reaped returns from the sale of Japanese supermarket chain Seiyu for $2.55 billion and a controlling stake in India’s JB Chemicals and Pharmaceuticals for about $1.4 billion.

The firm is going to balance the fifth fund’s investment portfolio across markets including Japan, India, China, South Korea and Southeast Asia, said one of the sources.

Reporting by Kane Wu; Additional reporting by Yantoultra Ngui in Singapore; Editing by Alexander Smith, Kirsten Donovan, Reuters