Global private equity firm KKR announced the final closing of KKR Global Infrastructure Investors II, a new $3.1 billion international fund focused on identifying, buying and managing infrastructure investments in OECD countries (emerging nations), on Wednesday.
The new fund received backing from a diverse group of global investors, including pension funds, asset managers, sovereign wealth funds, insurance firms and a variety of foundations. With the official closing of this second infrastructure fund, KKR now has close to $5.6 billion in infrastructure assets under management and has also invested more than one billion dollars through infrastructure co-investments.
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Statements from KKR management
“A decrease in public funding and weakened economic conditions in many regions are driving tremendous global demand for private investments in infrastructure, and KKR’s differentiated strategy allows us to meet this need with value-added solutions,” commented Marc Lipschultz, Global Head of KKR’s Energy & Infrastructure. “In a volatile world, our infrastructure strategy offers stability with both current income and capital appreciation for investors.”
Raj Agrawal and Jesus Olmos, the respective Heads of North American and European Infrastructure, noted, “By leveraging our team’s deep industry experience and global resources, we are uniquely positioned to pursue and capitalize on exciting opportunities within a stable asset class. We look forward to investing the Fund successfully.”
More on KKR Global Infrastructure Investors II fund
Of note, the new fund will follow KKR’s existing infrastructure investment strategy. This strategy is founded on the belief that there is an increasing need to replace, upgrade and expand infrastructure worldwide and especially in emerging nations. Therefore, KKR plans to make a variety of investments in the energy supply chain, water systems, roads, railways, airports and telecommunications.
Investments for the infrastructure fund are sourced on specific risk characteristics, including physical assets, assets central to the functioning of the local economy, irreplaceable assets, assets with long-term cash flows, assets minimally sensitive to economic cycles and inflation hedged assets.
KKR highlighted a number of recent infrastructure investments in its Wednesday statement, including supporting improvements to Bayonne, New Jersey and Middletown, Pennsylvania’s water and wastewater systems, a natural gas midstream platform with Veresen Inc. in Western Canada and providing capital funds for European Locomotive Leasing, an electric locomotive leasing firm that provides solutions to freight and passenger operators across Europe.