KKR Raises $698M for Asia Real Estate Partners Fund

Private equity pioneer KKR has raised nearly half of the $1.5 billion in capital that it has been targeting for its first real estate fund focused on Asia, according to a recent SEC filing.

The New York headquartered firm has received commitments of $698.1 million for its KKR Asia Real Estate Partners fund, according to the document dated 23 June.

KKR reached the milestone some 15 months after reports first surfaced of the new fund, which the firm launched alongside the third instalment of its buyout strategy targeting the Asia Pacific region.

Texas Pension Fund Commits $75M

Among the limited partners joining KKR Asia Real Estate Partners is the Texas Permanent School Fund which agreed early in 2019 to contribute $75 million to the fund. News of other subscribers to the strategy have not yet been released, and representatives of KKR declined to comment for this article.

When KKR first was reported to have launched the fund in March 2019 the firm was said to be contributing $250 million from its own balance sheet to Asia Real Estate Partners.

In a presentation to investors last month KKR reported that it had raised more than $10 billion in fresh capital during March and April across its strategies — an amount that surpasses all but four of its quarterly totals since the beginning of 2016.

Deploying Capital Around the Region

KKR’s Asian real estate strategy is led by former CLSA executive John Pattar who took charge of the property investment division in 2018.

In September of last year Pattar’s team had already begun putting some of the cash from the Asia Real Estate Partners fund to work buying a commercial property in Shanghai’s Huangpu district for an unspecified sum.

KKR made that acquisition of the 17,000 square metre (183,000 square foot) near the city’s historic Bund through an investment platform that it set up with Shanghai-based Hitone Capital to invest in distressed property.

In May of 2019 KKR made its first reported investment under Asia Real Estate Partners when it acquired a 50 percent stake in a retail podium in Hong Kong’s Ma On Shan area from Wang On Group and its development unit, Wang On Properties for HK$180 million ($22.9 million).

That deal was part of a HK$653 million joint venture that KKR set up with the Wang On entities.

During 2020 KKR made its fourth property investment in South Korea when it led a consortium which purchased the 23-storey 75,000 square metre (807,293 square foot) Namsan Square office tower in Seoul for a reported KRW 500 billion ($420 million).

Earlier this month, a KKR-led consortium paid VND 15.1 trillion (US$650 million) for a minority stake in Hanoi-based residential developer Vinhomes, through KKR’s Asian Fund III private equity vehicle.