Kohlberg Kravis Roberts has launched a $5 billion (€3.23 billion) infrastructure fund saying the asset class had an “enormous need for private investment.”
The New York-based buyout firm has hired former Lazard banker George Bilicic to head the initiative as it seeks opportunities in the energy, power and infrastructures arenas in Europe, Asia and the US.
In a statement, KKR said Bilicic, to be based in New York, would join as managing director and head of infrastructure. He would work alongside Johannes Huth, head of the firm’s European operations, and Marc Lipschultz and Fred Goltz, co-heads of the firm’s energy, power and natural resources industry group, who would oversee the initiative.
KKR said it would also boost its infrastructure team appointing senior advisors John Bookout and Clint Johnstone to the program. Bookout was previously a director at McKinsey & Company where he led the firm’s North American and European energy practices, while Johnstone was chief financial officer of civil infrastructure company Bechtel Group.
KKR declined to disclose financial details of the fund, however a report in the Financial Times said the firm would target $5 billion.
In a statement, founders Henry Kravis and George Roberts said the infrastructure asset class was crying out for private investment. “ KKR recognizes the important role infrastructure investing plays in the growth of both developed and developing economies.” It was, they continued a “logical extension” to KKR’s business.
A City source told the FT, KKR would invest in infrastructure from “existing funds” while it built its team.
The decision follows a raft of announcements by major investment banks over the past month seeking to raise infrastructure funds. Goldman Sachs is targeting the largest amount to date on $7.5 billion, while Morgan Stanley has just closed its $4 billion fund – $1.5 billion above its original target. Lehman Brothers is also targeting a $1 billion infrastructure fund, while Global Infrastructure Partners – a venture from Credit Suisse and General Electric – has raised $5.6 billion for the sector. ING Group is also seeking €1 billion for an infrastructure fund.