KKR has held a final close on $1.1 billion for its most recent real estate debt fund, which will invest in junior pieces of commercial mortgage-backed securities, PERE’s sister publication, Private Debt Investor, reported Wednesday.
The KKR Real Estate Credit Opportunity Partners fund exceeded its target fundraise, culling investments from global public pensions, insurance companies and family offices, according to a statement. The fund launched this January, a filing with the US Securities and Exchange Commission showed.
The RECOP focuses on CMBS collateralized loans backed by US real estate, a source familiar with the matter told Private Debt Investor.
The fund has completed a total of seven transactions of newly-issued CMBS B-notes as of this August, representing a total aggregate of $517 million and $225 million of invested equity, the statement showed.
The firm said that US risk retention rules, which went into effect in December, have opened opportunities in the CMBS market. KKR added it purchased the first CMBS transaction subject to risk retention earlier this year. The new rules require CMBS and CLO managers to hold a 5 percent interest in the credit risk of their securitized assets.
“With more than $50 billion annual conduit CMBS issuance, and a limited universe of B-piece buyers, there is a growing need for capital to satisfy the new regulatory framework,” Matt Salem, co-head of KKR’s real estate credit business, said in the statement.
The firm was not immediately available to comment further.
KKR launched its real estate platform in 2011, and it has since invested or committed over $4.5 billion in capital across more than 60 transactions in the US, Europe and Asia as of June 30, according to the statement. As of that date, the investment firm’s total assets under management topped $148 billion, with $43 billion in dry powder.