Private equity firm KKR & Co. Inc has raised $1.3 billion for a global impact fund, as it joins peers such as Blackstone and TPG in seeking to invest in companies that strive to solve environmental or social problems.
The KKR Global Impact Fund marked the final closing with help from a diverse group of investors, including public pensions, family offices and wealthy individuals, the American buyout firm said in a statement.
KKR will invest $130 million of capital in the fund through its balance sheet and employee commitments.
The PE firm didn’t name other investors. However, Swiss banking giant and the biggest global wealth manager UBS had said in September last year that it had raised $225 million from its private clients for the KKR fund.
KKR had started its impact investment business in 2018. Since then, the fund’s 12-person team has executed a number of transactions, including in Indian environmental services provider Ramky Enviro Engineers Ltd.
Apart from KKR, a number of marquee global investors have set up impact investment platforms. Singapore state firm Temasek floated an Asia-focussed impact fund in June last year while US-based Blackstone set up an impact investment platform the month before.
US-based TPG Capital was among the first PE firms to launch an impact investment platform, The Rise Fund, in 2016. The Rise Fund is also an active investor in India.
KKR said the impact fund will invest across the Americas, Europe and Asia. Specifically, it will focus on investing in companies in the lower middle market.
The PE firm has identified some macro themes for the fund. These include mitigating climate change, protecting clean water, responsible waste management and leveraging technology to enhance safety, mobility and sustainability.
“As investors, we have a significant role to play in building businesses that contribute to SDG solutions while also generating financial returns for our fund investors by doing so,” said Robert Antablin and Ken Mehlman, KKR partners and co-heads of KKR Global Impact, referring to the United Nations’ Sustainable Development Goals.