Bloomberg News

KKR Said to Seek Up to $6 Billion for Second Asia Fund

October 26, 2011

(Adds low end of fund target in second paragraph.)

Oct. 26 (Bloomberg) -- KKR & Co., the U.S. buyout firm co- founded by Henry Kravis, is seeking as much as $6 billion for its second Asian buyout fund, according to a person with direct knowledge of the plan.

The firm, based in New York, is planning to wrap up the first round of fund-raising by the middle of next year, said the person, who asked not to be identified because the talks are private. KKR’s first fund for investments in Asia, completed in 2007, gathered $4 billion, the low end of the target for the new pool.

Private-equity firms attracted $25.6 billion for Asia- Pacific funds this year through Aug. 31, compared with $38 billion in all of 2010, according to market researcher Preqin Ltd. Fund-raising in the region peaked at $88.4 billion in 2008, before the impact of the collapse of Lehman Brothers Holdings Inc. rippled through global markets, the London-based firm said in a report last month.

“While many investors from Asia-Pacific were affected by the downturn, the number of institutional investors from Asia- Pacific was swelling, helping to limit the damage to private- equity fund-raising in the region,” Preqin said in the report.

Kristi Huller, a spokeswoman for KKR, declined to comment on the new fund, which was reported earlier this month by the Financial Times.

Private-equity deals in Asia have tripled this year to $91 billion from 2010, according to data compiled by Bloomberg. TPG Capital, a Fort Worth, Texas-based rival of KKR, is seeking $4.5 billion to $5 billion for its latest fund in the region.

Higher Fees

Private-equity firms are charging higher fees for the biggest Asia-focused funds than elsewhere because of the limited choice facing investors, according to a survey by Squadron Capital Advisors Ltd. in April.

Blackstone Group LP, based in New York, in 2009 became the first global private-equity firm to start a local-currency fund in China, followed by Washington-based Carlyle Group and TPG.

KKR, which Kravis and George Roberts created with Jerome Kohlberg in 1976, has participated in some of the largest deals in private-equity history, including the record-setting takeover of energy producer TXU Corp. for $43.2 billion in 2007. That followed the 2006 acquisition of hospital operator HCA Inc. in 2006, the third-biggest deal, at $32.2 billion, and the fourth- largest, the $30.1 billion purchase of RJR Nabisco Inc. in 1988, according to data compiled by Bloomberg.

The firm, which managed $47.1 billion in private-equity assets as of June 30, is seeking as much as $10 billion for its next North American fund.

--With assistance from Cristina Alesci in New York. Editors: Larry Edelman, Josh Friedman

To contact the reporter on this story: George Smith Alexander in Mumbai at galexander11@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net


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