Private equity firm KKR & Co., or Kohlberg Kravis Roberts & Co., has closed its second global impact fund, raising $2.8 billion. The new fund — dedicated to investments that advance sustainability and social equity — is more than double the size of the firm’s first impact fund.
One of the oldest and most prominent alternative asset and private equity investors, the US-based KKR is credited with popularising the leveraged buyout as an investing strategy. The firm manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strategic partners, hedge funds.
While best known for its leveraged buyout strategy, the firm launched its impact investing business in 2018 recognising that sustainability was a global imperative. Further, sustainability as a thematic and ESG performance have been key parts of the firm’s investment considerations since as far back as 2008.
KKR Global Impact Fund II
Having raised $2.8 billion, the new fund is more than double the size of the firm’s first impact fund — KKR Global Impact I — which was one of the biggest funds of its kind at the time, at US$1.3 billion when it closed to investors in early 2020.
The Co-Heads of KKR Global Impact, Ken Mehlman and Robert Antablin, say more opportunities to deploy capital led to the firm attracting significantly more commitments from investors than it could when its debut impact fund launched in 2018.
They highlighted tailwinds such as the transition to cleaner forms of energy, the recycling of resources in the supply chain and the push by companies to develop their workforce.
Like the first, the second impact fund is aimed at investing in companies with a core product or service providing a solution to critical and relevant social or environmental challenges. To fall within the fund’s scope, investments must advance one or more of the United Nations 17 sustainable development goals in a measurable way. The impact fund can invest in companies alongside KKR’s other private equity funds, though in the majority of its investments it is the sole KKR fund participating.
Opportunity continues to grow
“We launched KKR Global Impact in 2018 because we saw an opportunity to invest behind proven companies that deliver scalable, commercial solutions to global problems,” said Antablin.
“Since then, that opportunity set has continued to grow, and we are thrilled with the outcomes our portfolio companies have been able to achieve. We are grateful for the support of our investors who share our conviction in this space, which we believe is well placed given the strong performance of our first fund.”
Mehlman added: “Globally, there is increased urgency to solve some of the world’s greatest challenges, such as the energy transition, supply chain resiliency, digitisation and a shortage of skilled workers.
“For example, analysis by KKR Global Impact portfolio company Lightcast found that the skills requested for the average US job have changed 37% since 2016, requiring a significant acceleration of upskilling. We believe our Global Impact strategy is well-positioned to invest behind these macro tailwinds.”
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