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KKR raises $160 mn under new India credit fund

10 January, 2017

Private equity giant Kohlberg Kravis Roberts & Co Ltd (KKR) has marked the pre-close of its second India-focussed credit fund and aims to make the final close in a few months’ time with a target of Rs 2,000 crore, according to a media report.

The PE firm has so far raised $160 million (Rs 1,100 crore), The Economic Times cited BV Krishnan, head of KKR’s credit and capital markets business in India, as saying. The fund was raised from domestic institutions, high net-worth individuals and family offices.

It will invest in structured credit situations in either promoter holding entities or companies over two to three years.

“The idea is to back quality promoters and good businesses, helping them to create a proper capital structure by cleaning up short-term liabilities, providing grown capital, and in some cases helping them consolidate their equity ownerships,” Krishnan told the newspaper.

The fund will have a private-equity approach for a debt market “which has done extremely well for us,” he added.

An email sent to a spokesperson for KKR did not elicit any response by the time of publishing this article.

KKR has been an active investor in India through both its PE and credit portfolio businesses. Its first India credit fund in 2013 raised Rs 1,500 crore with co-investments from limited partners. The fund has been fully deployed.

The PE firm has also dabbled in the non-banking finance sector in India to give a push to its credit business.

In November 2015, KKR agreed to invest in homegrown financial services firm Avendus Capital for a controlling stake. This investment came after the global private equity giant established a new NBFC to provide structured credit solutions to the real estate sector in India, with investment from GIC, Singapore’s sovereign wealth fund, in January the same year.

KKR also invests in India through its global fund. In April last year, the firm marked the final close of its $3.35 billion global special situations fund.

The KKR Special Situations Fund II LP received backing from a diverse group of new and existing global investors, including public and corporate pension funds, sovereign wealth funds, insurance companies, foundations, endowments, private banking platforms, family offices and individual investors. 

The new fund is the successor to the KKR Special Situations Fund, which was the firm’s first dedicated special situations vehicle. The fund completed fundraising in December 2013 with $2 billion in capital commitments.

KKR isn’t the only PE firm with a lending business. In August last year, VCCircle reported that Baring Private Equity Asia planned to build a credit platform that would provide debt capital to mid-market companies.

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KKR raises $160 mn under new India credit fund

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