Global buyout fund Kohlberg Kravis Roberts & Co (KKR), which recently decided to list on the NYSE, has said it is considering investing in infrastructure sector in India and China. The leveraged-buyout firm run by Henry Kravis and George Roberts said in an SEC filing that as a part of its growth initiative, it plans to expand into areas such as mezzanine financing, real estate and infrastructure. KKR said that though emphasis will be on infrastructure investments in OECD (Organization for Economic Cooperation and Development) economies, India and China will also be in investment destinations. (See KKR’s global portfolio after the jump)
KKR entered in India a couple of years ago by buying out Flextronics Software, which was renamed as Aricent Technologies, for $900 million in the largest leveraged buyout in India. Earlier this year, it also made a strategic investment of $250 million in Bharti Infratel Ltd, the tower arm of India’s largest private sector telco Bharti Televentures. The firm has put fair value of these two investments as $463 million, according to the disclosures to the Securities and Exchange Commission (SEC).
George Bilicic, the former head of Lazard’s global power and energy investment banking, was brought in to start an infrastructure fund. The infrastructure team will have a presence in the United States, Europe and Asia.
The infrastructure investments that KKR is looking at are energy, waste and wastewater, transportation and telecommunications assets, but may also include social infrastructure and infrastructure-related assets. The investments will be made in the form of equity and equity-related securities but they may also consider debt-related securities. In its 32-year old history KKR has made more than 165 private equity investments with a total transaction value in excess of $420 billion.
Infrastructure is the new favourite of global private equity giants. While Morgan Stanley and Global Infrastructure Partners (PE firm backed by Credit Suisse and General Electric) have announced almost $10 billion worth funds for infrastructure, Goldman Sachs is raising a targeted $7.5 billion fund. As for India specific funds, Citigroup Inc., and Blackstone Inc are planning a $5 billion fund for India (of which Citi has already raised $500 million). Macquarie Capital Group Ltd. and State Bank of India are co-raising a $2 billion infrastructure fund, while 3i Group of UK has already raised a $1.2 billion fund. ICICI Venture is following suit with a $1 billion fund.