KKR closes $17 billion for its Global Infrastructure Fund IV to invest in infrastructure opportunities within OECD countries in North America, and Western Europe

Asset management firm Kohlberg Kravis Roberts & Co. (KKR) has closed  $17 billion for its Global Infrastructure Investors IV (the “Fund”) to invest in global infrastructure investment opportunities in OECD countries in North America and Western Europe.

The closing comes at a time of significant growth in demand for private infrastructure investment, particularly in sectors including digital communications, energy transition, transportation, water, waste, and industrial infrastructure, among others.

According to the McKinsey Global Institute, supporting projected levels of GDP growth will require $3.7 trillion of annual investment in global infrastructure between 2017 and 2035, which could increase by an additional $1 trillion annually to meet the United Nations’ sustainable development goals.

We wrote about KKR back in 2020 when the firm closed a $2.2 billion Next Generation Technology Growth Fund II for investment in tech startups across North America, Europe, and Israel.  The fund, called “NGT II” or the “Fund”, will be dedicated to growth equity investment opportunities in the technology space in North America, Europe, and Israel. NGT II is the successor fund to KKR Next Generation Technology Growth Fund (“NGT I”), KKR’s first dedicated global technology growth equity vehicle which completed fundraising in December 2016.

Henry Kravis founded KKR along with two other business partners in the late 1970s when he was just 32. The firm’s objective was to create and manage private equity funds that borrowed money in order to acquire businesses that were underperforming. Kravis and his partners later improved these businesses and sold them at a profit. As of March 31, 2020, the company had $207 billion in assets under management.

In a statement, Head of North American Infrastructure at KKR Brandon Freiman said, “Global demand for building and upgrading critical infrastructure, as well as supporting responsible energy transition and growing broadband access, requires funding far in excess of public sources, which provides a big opportunity for private capital.”

Vincent Policard, Co-Head of European Infrastructure at KKR, added: “With the close of our latest infrastructure fund, we look forward to deepening our commitment to meeting this pressing global need and continuing to make investments where we believe our differentiated approach and platform can create value for the long-term.”

Consistent with KKR’s risk-based approach to infrastructure investing, the Fund will focus on critical infrastructure investments with low volatility and strong downside protection where KKR believes it can achieve attractive risk-adjusted returns by leveraging its experienced team, risk-based strategy, long track record of operational value creation, and global network of industry experts. The Fund has a broad investment mandate across a number of infrastructure sectors and predominantly pursues assets with strong existing cash flows and attractive reinvestment opportunities for future growth.

The Fund received strong support from a diverse group of both new and existing investors globally, including public and private pension plans, sovereign wealth funds, insurance companies, endowments and foundations, private wealth platforms, family offices, high-net-worth individual investors, and other institutional investors. KKR will be investing $1 billion of capital in the Fund alongside these investors through the Firm’s balance sheet, affiliates, and employee commitments.

“At more than double the size of its predecessor, the success of KKR Global Infrastructure Investors IV speaks to the robust opportunities that we see in this asset class and to the confidence that our investors continue to place in our infrastructure team and our ability to deliver compelling risk-adjusted returns across a variety of market conditions,” said Alisa Amarosa Wood, Global Head of Private Markets and Real Assets Product Strategies at KKR.