KKR backs Maia Financial’s A$100m asset financing facility

The new facility is set up as a ‘rolling’ fund, targeting investments in Australia and New Zealand.

Global private equity giant KKR has backed a A$100 million ($127.7 million; €112 million) specialised financing facility launched by Sydney-headquartered structured finance firm Maia Financial for investments in New Zealand and Australia.

KKR’s investment is understood to have come from different closed-end credit vehicles, a spokesperson from KKR confirmed with PDI. The source declined to comment further on the exact amount of capital contributted from KKR’s funds.

An Australian structured finance firm, Maia Financial’s new specialised financing fund will focus on leveraging new or existing assets that are either on or off balance sheet to fund new assets, “leaving the senior debt untouched,” according to the firm’s chief executive Daniel Blizzard.

“This structure gives flexibility to the type of assets it can fund, the terms and the ability to structure repayment to the required cash flows or repayment structures,” Blizzard told PDI.

Described as a ‘rolling facility’, the A$100 million-sized asset finance fund is to be renewed if the funds are fully distributed within 12 months.

The firm says each deal made within the facility will be tailored to the requirements of the businesses Maia Financial works with, including in the plant, equipment, infrastructure and property sectors.

Since 2010, KKR has been building up its private credit-dedicated commingled fund management business, with its first fund, KKR Mezzanine Partners I, closing on over $1 billion in August 2011, according to PDI data. KKR has three additional commingled funds as of 9 July:  KKR Lending Partners I, KKR Lending Partners II, and KKR Private Credit Opportunities II.

The firm held a final closing of KKR Private Credit Opportunities Partners II, its global mezzanine debt fund, at over $2.23 billion, according to PDI data as of Q1 2018. The fund mainly targets subordinated debt securities, corporate mezzanine investments as well as asset-backed and specialty finance investments.

KKR Special Situations Fund I and II, two commingled funds, were launched in 2012 and 2015, respectively. PDI data show that Healthcare Foundation of New Jersey, Ocean Wilsons Holdings Limited and Teacher Retirement System of Texas backed Fund I. South Carolina Retirement System and Virginia Retirement System disclosed $150 million-sized commitments to the second special situations fund.

KKR is looking to deploy capital to generate carried interest from invested capital, according to Todd Builione, president of KKR Credit and Markets, speaking at its Investor Day held on 9 July. “Our model in credit is that we need to invest this capital, in order to turn those management fees on,” Builione said at the time.

KKR has merged its private credit and markets businesses to boost profitability. The credit arm is looking to deploy more of its $6 billion-sized dry powder as of 9 July, according to Builione, adding that: “We realized that we need to move our originators from a a product paddling position to a solution providing business.”

Elsewhere in Asia-Pacific, KKR’s credit arm has been active in the Indian corporate credit market. The firm’s latest country-specific fund, KKR India Alternative Credit Opportunities Fund II, is targeting subordinated and mezzanine debt investments.

KKR Credit had $60.7 billion assets under management as of 30 June.