KKR’s second direct lending fund raises $1.34bn

Successor fund to first direct lending initiative closed well over its $500 million target.

KKR has reached a final close of $1.34 billion on its second direct lending fund, KKR Lending Partners II, the US-based firm announced. KKRLP II started fundraising in the first quarter of 2014 and the firm’s $460 million KKRLP I, its debut direct lending fund, reached the end of its investment period in December 2014.

Like the predecessor fund, the strategy focuses on directly sourced senior loans. It is driven by the illiquidity premium offered by privately-arranged deals over the syndicated loan market. The fund has a global remit but is limited to developed markets and will focus on the US. 

KKRLP II had a target of $500 million, according to PDI Research & Analytics. 

Both new and existing investors supported the strategy, the firm said in a statement, including public pensions, insurance companies, private banking platforms and family offices as well as individual investors. 

“We are very pleased that we were able to attract a nice mix of new and existing KKR direct lending investors to the Fund. We have a strong pipeline and are very optimistic about the opportunity set,” Erik Falk (pictured), co-portfolio manager of the fund, said in the statement. 

The fund has been investing since it held a first close in June 2014. KKR is also in the market with its first European direct lending fund which is targeting €1.5 billion. That vehicle recently executed its fourth deal, supporting the unitranche financing for TowerBrook’s buyout of Dutch food supplier Van Geloven, as reported by PDI. ICG, Investec and Rabobank were also involved in the loan. 

Inclusive of the capital raised for KKRLP II, the credit team is managing approximately $5 billion in capital available for direct lending today. 

KKR’s other business lines include private equity, energy, infrastructure, real estate, credit and hedge funds. It had more than $98 billion in assets under management as of 31 December 2014.