Private equity giant KKR has received a $50 million capital commitment to its new Asia Pacific infrastructure strategy from the Employees Retirement System of Texas, as real estate fund managers continue to rake in cash from state institutions in the US.
The new fund, KKR Asia Pacific Infrastructure Investors II, was launched in April and secured its $50 million investment from ERS in May, according to records of the system that manages the retirement savings of Texas state employees.
The Luxembourg-incorporated fund is being managed from KKR’s offices at Li Ka-shing’s Cheung Kong Center in Hong Kong’s Central district. The strategy is a follow-up to the 2020-vintage KKR Asia Pacific Infrastructure Investors, which is run from Seoul and closed on $3.79 billion in commitments in 2021.
A KKR representative had no comment on the fresh fundraising when reached by Mingtiandi on Wednesday. In a mid-year update published this month, the company said it remained bullish on infrastructure investments including data, data storage, power generation and select parts of transport.
Pensions Pony Up
Before its latest contribution, the $35 billion ERS made a bet on the region earlier this year with a $50 million capital commitment to Hong Kong private equity firm PAG’s third pan-Asian core-plus/value-add real estate fund.
The pledge to PAG Real Estate Partners III was disclosed in a January 2022 update by the Texas pension manager, as reported by Mingtiandi in February.
Other commitments from US state retirement systems disclosed during the first quarter included $75 million from the New Mexico State Investment Council for Blackstone’s $9 billion Real Estate Partners Asia III fund and $300 million from the California State Teachers’ Retirement System for LaSalle Investment Management’s Asia Opportunity VI vehicle.
The Blackstone fund had previously pulled in a $100 million commitment from Florida’s State Board of Administration and a $100 million pledge from the Teachers’ Retirement System of Illinois during the fourth quarter of 2021.
Primed for More Deals
New York-based KKR bolstered its Asia team in January with the hiring of Ami Momaya as a director to manage the company’s infrastructure investments. Momaya previously served as a partner at National Infrastructure Investment Fund and as an executive director at Morgan Stanley Investment Management.
KKR has kept busy with Asian deals this year as the legendary buyout firm boosts its presence in the region’s real estate market under the leadership of John Pattar.
In April, KKR completed its acquisition of the Twenty Anson office tower in Singapore’s downtown core, paying Boston-based fund manager AEW just under S$599 million ($441.6 million) for the 20-storey property in the Tanjong Pagar area, according to sources familiar with the transaction who spoke to Mingtiandi. The deal marked KKR’s first office investment in the city-state.
A month earlier, the private equity major had agreed to acquire a Japanese REIT manager held jointly by Mitsubishi Corporation and UBS Asset Management for $2 billion in an all-cash, balance sheet transaction using no client funds.