The size stands out because this is not an easy moment to raise money. Raj Agrawal, who leads KKR's real assets team globally, says capital allocations are tight and many managers are struggling.
"We could not be more pleased with the fund close in a fundraising environment where oftentimes people hear capital allocations are tight, managers are struggling," he said. "We have grown our platform, and we believe we've continued to take share."
KKR has been investing in this space for a long time. It started during the 2008 financial crisis and closed its first infrastructure fund in 2012.
Since then, it has built about $120 billion in assets, with a focus on protecting capital in every kind of market. Agrawal credits the pandemic with a boost: when stock markets dropped, KKR's infrastructure bets earned better-than-average returns and pulled investors in.
There are nine investments already in the fund. Among the holdings are EDF Power Solutions Inc.'s North American renewable business, European data-center provider Global Technical Realty, and a leasing program for aircraft with Altavair LP.
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50% of KKR's infrastructure deals happen with a corporate partner.
As Agrawal put it, "We can't keep up. There's a ton of opportunity."
Still, KKR is being careful. It steers clear of investments whose contracts come up for renewal within five to seven years.
It also avoids digital-infrastructure assets trading near 30 times earnings. That means investors pay about $30 for every $1 of annual profit, a price that needs strong growth to avoid losses.
Agrawal thinks the market is not separating good data-center bets from bad ones. "Today the market is pricing them pretty similarly," he said. "Maybe that works in an upmarket when everything is going right. And in a down market, we believe the market will differentiate."
KKR prefers data centers sized in the hundreds of megawatts and built for AI inference, which is when a trained model actually answers a question. It is less interested in the 2 to 3 gigawatt facilities built to train models.
The firm also prefers multi-client data centers over custom buildings made for a single big customer. That preference led KKR to create Helix Digital Infrastructure earlier this year.
When a firm raises this much money, it is making a big bet. The wager is that the physical side of technology, the land, cables, power lines, and cooling systems, will keep growing for years.
That bet reaches beyond KKR's private funds. Utilities, industrial companies, and technology firms all do business with this kind of buildout, and many of them show up in the portfolios regular investors already own.
There are risks. Construction can fall behind schedule, power can get more expensive, and demand can cool off.
For most people, the practical takeaway is straightforward. The internet runs on real buildings and real electricity, and someone has to pay for them.
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