US Asset Management Firm KKR Forms 1.5 Trillion KRW Asia Investment PEF

NH Amundi Asset Management, Recruiting Domestic Institutional Investors
Investing in Korea, China, Japan, and Southeast Asia Regions

[Asia Economy Reporter Lim Jeong-su] KKR (Kohlberg Kravis Roberts), a US-based private equity firm, is recruiting institutional investors in the domestic financial market to invest in its Asia investment fund. The fund size is a total of $12.5 billion (approximately 1.5 trillion KRW), and NH-Amundi Asset Management plans to invest in a fund-of-funds structure.

According to the investment banking (IB) industry on the 29th, NH-Amundi Asset Management is gathering investors for the 'NH-Amundi KKR IV Private Investment Trust No.1' fund. This fund will participate as a limited partner (LP) in the 'KKR Asia Fund IV,' an Asia investment fund managed by KKR.

KKR plans to raise an Asia investment fund totaling $12.5 billion in global markets including Korea. This is KKR’s fourth Asia private equity fund, investing in Korea, China, Japan, and Southeast Asia.

The fund management (GP) will be handled by KKR’s local entity in Luxembourg, a leading European tax haven (KKR Asian Fund IV SCSp). The total management period is 11 years, but investment execution is planned to be completed within 6 years. The target return is set at a 20% gross internal rate of return (Gross IRR).

KKR is a mega hedge fund managing assets totaling $208.4 billion (approximately 250 trillion KRW) in the global financial market. It generates profits by investing in mergers and acquisitions (M&A), corporate equity, energy, infrastructure, corporate bonds, and hedge funds. Early in its entry into the domestic market, it was sometimes viewed negatively as a global corporate raider.

KKR’s Asia investment performance is evaluated as excellent. It is known to consistently achieve returns exceeding 20% annually. Currently, the core investment regions of KKR’s Asia investment fund are Japan at 27%, followed by Southeast Asia (17%), India (16%), Australia (13%), and Korea (10%). By industry, 37% is allocated to traditional manufacturing, 23% to TMT (technology, media, telecommunications), and 15% to healthcare. A total of 76% of investments are management-participation equity investments.

KKR became known domestically in 2009 by acquiring OB Beer, formerly a Doosan Group affiliate, from AB InBev, the world’s largest beer company, for $1.8 billion (approximately 2.3 trillion KRW). Five years later, in 2014, it resold OB Beer to AB InBev for $5.8 billion (approximately 6.2 trillion KRW), more than three times the purchase price, generating substantial profits.

In 2018, KKR acquired 100% of KCFT (copper foil business for automotive batteries) shares held by LS Mtron for $266 million (approximately 289 billion KRW). At that time, it also purchased 60% of LS Automotive Technology shares. Last year, KKR sold all KCFT shares to SKC for 1.19 trillion KRW, four times the purchase price, realizing significant profits.

Despite excellent returns, it is uncertain whether investor recruitment will proceed smoothly due to uncertainties in Asia investments, especially in China excluding Japan. An industry insider said, "Many domestic institutional investors have hesitated to deploy funds after suffering losses investing in China through PEFs," adding, "Recent incidents such as the Lime scandal are also acting as negative factors for investor recruitment."

This content was produced with the assistance of AI translation services.