Quiver Quantitative - KKR (KKR) has successfully raised $11 billion for its fifth global infrastructure fund, making significant progress towards its ambitious $20 billion target. This fundraising effort, which began in November, reflects strong investor confidence in KKR's infrastructure strategy, despite the fund not yet having its first close. The impressive track record of KKR’s previous infrastructure funds, which have delivered high internal rates of return (IRRs), continues to attract substantial interest from investors looking to capitalize on global infrastructure opportunities. KKR's proven expertise and strategic management in this sector are evident as they manage to draw substantial capital amidst a competitive investment landscape.
The growth trajectory of KKR's infrastructure portfolio is noteworthy. From the inception of its first fund, which achieved a gross IRR of 17.6%, to its second fund with a 19.7% gross IRR, and its most recent vehicles which continue to perform robustly, KKR has consistently demonstrated its ability to generate strong returns. This performance underscores the firm's adeptness at selecting, managing, and exiting investments in a way that maximizes investor value. The sustained increase in the scale of KKR’s infrastructure funds, from $17 billion raised for the fourth vehicle in 2022 to the current $20 billion target for the fifth, highlights the growing investor trust and the expanding scope of the firm’s infrastructure endeavors.
Market Overview: -KKR raises over half of its $20 billion target for its latest global infrastructure fund, showcasing continued investor appetite for the asset class. -The strong fundraising demonstrates KKR's historical success in infrastructure investments, delivering high returns for its investors.
Key Points: -KKR secures $11 billion for KKR Global Infrastructure Investors V, exceeding half of its intended capital raise. -The success builds upon KKR's impressive track record in infrastructure, with previous funds generating gross internal rates of return exceeding 17%. -The firm hasn't yet formally closed the fund, indicating potential for additional capital commitments.
Looking Ahead: -KKR's ability to reach its $20 billion target will be a key indicator of investor confidence in the global infrastructure landscape. -The success of the fund will likely translate into further investments in diverse infrastructure projects worldwide.
Under the leadership of Raj Agrawal, KKR’s global head of infrastructure, and the strategic direction of Co-Chief Executive Officer Joe Bae, the firm’s infrastructure business has burgeoned. Since 2018, it has grown from approximately $13 billion to $59 billion. This expansion is not just a testament to the firm’s effective fund management but also reflects the increasing importance of infrastructure as a distinct asset class that offers both resilience and attractive returns amidst broader market volatility.
As KKR continues to advance towards its fundraising goal, the infrastructure sector remains a focal point for global investors seeking stable and lucrative investment opportunities. The firm's ability to nearly triple its fund size in just a few years indicates a robust market appetite and positions KKR as a leading player in the global infrastructure investment arena. Moving forward, the performance of KKR’s fifth infrastructure fund will be closely watched, as it seeks to not only meet but perhaps exceed the high standards set by its predecessors.
This article was originally published on Quiver Quantitative