News & Analysis

KKR has raised $17 billion in fresh capital for its fourth global infrastructure fund, as it seeks to capitalize on investors' growing appetite for infrastructure investments.

The firm closed KKR Global Infrastructure Investors IV fund well above a $12 billion fundraising target. The fund is more than twice the size of its predecessor, which closed in 2018 at $7.4 billion.

KKR has attracted money from sovereign wealth funds, insurance companies, endowments, family offices, wealthy individual investors and other institutional investors, KKR said in a statement. The asset manager said it will invest $1 billion of its own capital from its affiliates, balance sheet and employee commitments.

Pension funds that have made commitments to the vehicle include the New York State Common Retirement Fund, the Minnesota State Board of Investment, the Michigan Retirement Systems and the Santa Barbara County Employees' Retirement System, according to pension documents seen by PitchBook.

KKR's latest infrastructure fund has a global investment mandate and will focus on North American and Western European countries in the Organisation for Economic Co-operation and Development, the statement said. About 40% of the fund is expected to be invested in North America, with the remaining invested in other OECD member countries, according to a quarterly report on the Santa Barbara County Employees' Retirement System's performance reviewed by PitchBook. KKR's team looks to invest $500 million to $1 billion in equity per deal, according to the report.

The fund will focus on "critical infrastructure investments with low volatility and strong downside protection," across infrastructure sub-sectors spanning digital communications, energy transition, transportation, water, waste and industrial infrastructure, KKR said in its statement.

The firm has deployed capital from the latest fund. Recent deals include investments in data center-focused REIT CyrusOne, European maritime leasing company Ocean Yield, Dutch soft-drink bottler Refresco and US fiber-to-the-home provider MetroNet Holdings, according to a KKR spokesperson.

In January, Apollo Global Management closed its second fund dedicated to infrastructure investments, raising about $2.54 billion in committed capital. The fund invests in mid-market infrastructure assets primarily across communications, power and renewables, and transportation. Brookfield Asset Management is seeking $25 billion for its fifth flagship infrastructure fund, Bloomberg reported last month.

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