New York State Common backs KKR Asia for at least $275 mln

  • NYS’s second commitment to an Asia-focused fund this year
  • KKR seeking $7 bln for Asia Fund III
  • Previous fund netting 26 pct IRR, per Minnesota docs

New York State Common Retirement Fundwill commit at least $275 million to KKR Asian Fund III, according to an investment disclosure the system released. The commitment could be expanded up to $300 million.

The commitment to Kohlberg Kravis Roberts & Co marks NYS Common Retirement Fund’s second investment in an Asia-focused vehicle this year. In January, the retirement system committed $15 million to Crown CG through its separate account with Asia Alternatives.

KKR is seeking $7 billion for its latest Asian buyout fund, Minnesota State Board of Investment documents show. The fund has a Pan-Asia focus, according to New York’s investment disclosure.

The firm will use the fund to explore opportunities across a number of sectors, including food safety and agriculture, healthcare, financial services, corporate carve-outs and cross-border investments, Minnesota reported in its investment memo.

KKR’s previous Asia-focused fund, which raised $6 billion, was netting a 26 percent internal rate of return and a 1.4x multiple on invested capital as of Sept. 30, according to Minnesota documents.

Depending on how its commitment to KKR is ultimately sized, New York State Common Retirement Fund will have committed between $790 million and $815 million to private equity this year, according to pension documents. The $178.6 billion retirement system committed $500 million to an Oaktree Capital Group fund in February.

New York held 7.8 percent of its investment assets in PE as of March 31, 2016. New York State Comptroller Thomas DiNapoli is sole trustee of the state’s retirement system.

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