NEW YORK CITY-Kravis Roberts & Co. LP, a global investment firm led by Henry Kravis and George Roberts, has invested $4 billion in two funds dedicated to energy, infrastructure and natural resources as part of the company’s strategy to expand its footprint beyond private equity.
“There is a growing need for capital to support investment and growth in critical public and private infrastructure,” says Raj Agrawal and Jesus Olmos Clavijo, heads of North American and European Infrastructure at KKR, in a statement. “Given its long term and predictable cash flow, coupled with the growing need for investment, we continue to believe that infrastructure is an attractive, stable asset class.”
After already committing $1.3 billion to separate infrastructure accounts, KKR has now raised more than $1 billion for its infrastructure fund, which will target midstream energy, utilities, renewable energy, social infrastructure and transportation-related projects, totaling $2.4 billion altogether. In addition, the company has also closed its natural resource fund at $1.25 billion, which also includes $350 million of capital outside the fund, according to a statement.
Both funds include capital from global insurers, pension plans and family offices, though a spokeswoman for KKR declined to disclose the funding sources to GlobeSt.com, citing confidentiality agreements.
Under the fund, the company’s recent infrastructure investments include operating a wind-powered electricity generation business in France in partnership with Sorgenia, an Italian operator; a solar generation partnership with T-Solar; and SunTap, a partnership with Google and Recurrent Energy that manages a global portfoli of solar photovoltaic facilities. The fund has also made an investment in Saba Infraestructuras, an operator of car and logistics parks. Before formation of the fund, KKR also acquired a 23.44% stake in the Colonial Pipeline Co., an interstate common carrier of petroleum products in the US.
On the natural resources front, KKR has completed six separate transactions worth more than $950 billion in the Barnett Shale, East Texas, North Louisiana, Mississippi and the Texas Gulf Coast. After the close, the company has the capacity to purchase nearly $2 bullion of additional properties.
“The commercialization of unconventional oil and gas reservoirs has created new opportunities to grow and develop our domestic energy resources,” says Jonathan Smidt, a member of KKR and head of KKR natural resources. “With KNR, we seek to help operators focus their capital and resources on these exciting opportunities by acquiring their non-core assets, which provides them with capital to reinvest in attractive growth opportunities.”
As of March 31, KKR has $62.3 billion in assets under management.
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