KKR, a prominent leader in the global investment arena, has just announced a significant milestone: the completion of a whopping $6.5 billion fundraise aimed at enhancing its portfolio in privately originated and negotiated credit investments. This initiative is particularly focused on capitalizing on large and diverse pools of financial and tangible assets. Breaking down this massive figure, $5.6 billion comes from KKR Asset-Based Finance Partners II, while nearly $1 billion originates from separately managed accounts that share a similar investment focus.
In the words of Daniel Pietrzak, Partner and Global Head of Private Credit at KKR, “The $6 trillion Asset-Based Finance (ABF) market, which is expected to exceed $9 trillion by 2029, is brimming with opportunities, yet it remains undercapitalized.” This fund aims to bridge that gap by providing long-term capital to the real economy and giving investors a unique chance to diversify their portfolios. KKR’s initiative emphasizes high-quality, non-corporate collateral-backed cash flows, presenting another layer of appeal for potential investors.
The response to KKR’s vision has been overwhelmingly positive. Co-heads of ABF, Varun Khanna, Avi Korn, and Chris Mellia, shared their excitement, noting, “ABFP II’s impressive size—over 2.5 times larger than its predecessor—proves that investors trust us to deliver substantial risk-adjusted returns.” The diverse investor base includes public and corporate pensions, sovereign wealth funds, private banks, insurance companies, asset managers, and family offices, reflecting not only the fund’s appeal but also its wide-reaching impact on the investment landscape.
Established in 2016, KKR’s ABF strategy has grown remarkably, now managing more than $74 billion in ABF assets. This impressive feat is bolstered by a dedicated team of around 50 professionals focused exclusively on the ABF sector. KKR employs two main investment strategies: an opportunistic approach and a high-grade strategy that targets investment-grade opportunities at the capital structure’s top.
Delving deeper into their investment philosophy, KKR’s ABF portfolio revolves around four pivotal themes: Consumer/Mortgage Finance, Commercial Finance, Hard Assets, and Contractual Cash Flows. With 18 captive ABF platforms operating across these sectors, KKR can source and structure investments innovatively. This multi-sector approach allows KKR the flexibility to tap into a range of industries that include aviation, real estate, automotive finance, mortgages, royalties, and equipment leasing, truly painting a diverse picture of investment potential.
Over the years, KKR has earned its place as one of the largest private credit platforms globally. Its ability to invest across various points in the capital structure and liquidity spectrum sets it apart from many competitors. KKR pairs these capabilities with a robust emphasis on proprietary sourcing, capital preservation, and active portfolio management, all aimed at achieving long-term capital appreciation with favorable risk-adjusted returns. Currently, KKR manages approximately $254 billion in credit assets on a global scale, which comprises around $117 billion in private credit and $129 billion in leveraged credit.
About KKR
As a trailblazing global investment firm, KKR offers a spectrum of alternative asset management solutions, including capital markets and insurance offerings. With a steadfast commitment to delivering attractive investment returns, KKR adopts a patient and disciplined investment approach, backed by a team of world-class professionals. The firm is dedicated not only to growing its portfolio companies but also to making positive impacts within the communities it operates. KKR sponsors a variety of funds that focus on private equity, credit, and real assets, while also partnering with hedge funds. Furthermore, KKR’s insurance affiliates provide a wide range of retirement, life, and reinsurance products managed by Global Atlantic Financial Group. To delve deeper into KKR’s operations, visit www.kkr.com. For more information on Global Atlantic Financial Group, check out their website at www.globalatlantic.com.
