KKR starts fundraising for its third infra fund

The vehicle will target around $5bn, as Fund II, closed in 2015, still has $1.82bn of uncommitted capital.

KKR began fundraising its third global infrastructure fund last month, a source familiar with the matter confirmed to Infrastructure Investor.

The source did not disclose additional details about the fundraise, but Infrastructure Investor reported in April the fund will be sized around $5 billion.

KKR declined to comment for this story. But Craig Larson, the New York-based firm’s head of investor relations, said on the firm’s third quarter earnings call that their two previous funds combined are “at almost $6 billion AUM and we’re fundraising for an infrastructure strategy”.

In the firm’s earnings report, KKR announced it managed $153 billion in assets overall as of 30 September. There are $1.82 billion of uncalled commitments in its Global Infrastructure Investors II fund, which closed in July 2015 on $3.1 billion. Janetschek said they will put between $600 million and $700 million to work in the fourth quarter or first quarter of 2018.

KKR executives touted the firm’s approach to funding deals in its €2.95 billion acquisition of European parking operator Q-Park. The firm financed the deal using €1.8 billion of equity and €1.2 billion of debt. Not wanting to overexpose its infrastructure fund, KKR said it used €300 million of the vehicle’s equity and syndicated the rest to co-investors.

“We were able to deliver significant co-invest opportunity to our infrastructure investors, allowing us to highlight our strong sourcing capabilities and demonstrate that our infrastructure platform can support even larger fund sizes in the future,” co-president Scott Nutall explained on the call.