KKR, the New York-based private equity firm, has finished capital raising for its first Europe-focused real estate fund.
The firm is expected to announce it has raised $739 million of equity for its KKR Real Estate Partners Europe (REPE) fund after receiving commitments from institutional investors including public pension plans, insurance companies, endowments, private banking platforms, family offices and high net worth individuals.
In so doing, KKR becomes one of a small handful of first-time fund managers to have reached a final closing for a real estate opportunistic fund since the global financial crisis. Others include fellow London-based firms Tristan Capital Partners and Kildare Partners.
Since 2013, KKR has completed approximately $1.3 billion of transactions in the region, including six deals which have seeded REPE.
These deals comprise some high street shops in Glasgow, switching stations in Italy, a hotel in Antwerp, a mixed-use property in Munich and a portfolio of logistics and office assets in France. Combined, the deals accounted for approximately 20 percent of the equity of the fund.
KKR, which committed about $100 million of the fund’s equity, is aiming to provide gross returns at the fund level of more than 16 percent from its investments.
The fund will run for 10 years, but has options for one year extensions as is custom for private equity-style vehicles such as this.
REPE is the second real estate fund to be raised by KKR since it established a platform dedicated to the sector in 2011. The first is a US vehicle, which had a small allowance for European property deals, however it is understood that this subsequent European fund has priority on European deals.
In an announcement on the fundraising, Guillaume Cassou (pictured), head of European real estate at KKR, said: “We continue to build our real estate platform in Europe and the final close of REPE is a key milestone in this effort.”
“We believe that we are well positioned to build a diverse portfolio of investments capable of yielding attractive risk-adjusted returns, as evidenced by the portfolio of six investments that we have seeded the Fund with across a variety of sectors and countries.”