Kkr Asian Fund

Fund Summary

Introduction

KKR Asian Fund is operated by Kohlberg Kravis Roberts & Co. (KKR). In 2007, KKR raised $4 billion for its Asia fund and got a preliminary pledge of $500 million from its largest investor, the Washington State Investment Board.

Vintage | 2007 |

Geographic Focus | Invests in Asian businesses with its main focus in Greater China, Japan, and Australia. |

Strategy | Focuses primarily on control transactions of industry-leading businesses. |

Investment Period | Six years |

Source: kkr.com

“KKR is one of the world’s largest and most successful private equity firms (ranked number 2 by Fortune in 2007). Established in 1976, KKR is a leading global alternative asset manager. KKR’s founders, Henry R. Kravis and George R. Roberts, are pioneers of the leveraged buyout industry.”

Success & Challenges

In the past three years, KKR Asian Fund performed well but not in the peak. According to statistics, the net IRR of KKR Asian Fund is 3.2% and the investment multiple is 1.00X. The PE funds should maximizing the IRR and MOI. Based on the standard we discussed in session (2.5X MOI and 20%+ IRR are good), KKR Asian Fund still has a long way to go.

There are several challenges KKR Asian Fund encounters. Under Asia’s specific environment, private equity buyouts have been few because most of publicly traded companies controlled by state. Hence, one of the challenges is the resistance from the governments of Asia’s countries, such as China and Korean, wary of foreign investment dollars. Also, the rising corporate valuations will deter those seeking bargains. In the internal environment, especially in the initial years, KKR’s lack of a long track record in Asian region and the fact that the Asian team never worked together before create the potential risks.

However, although the cross-border deals are complicated and risky in Asia, KKR is still confident that they can take a favorable position. Even though KKR did not do a lot of investing in...