SYDNEY, Sept 19 (Reuters) - KKR & Co Inc is seeking to raise as much as A$825 million ($560 million) for an Australian credit fund, in what would be its first listed investment vehicle in the country.
The move is part of the U.S. buyout firm’s efforts to tap retail investors globally.
“For 40 years of KKR’s history, we primarily have relied on institutional capital to grow our business,” Jeremiah Lane, head of the fund, said in a phone interview. “In the individual market, we see a market that is 1) bigger and 2) growing faster.”
The KKR Credit Income Fund, which will extend loans to companies, hopes to tap investor hunger for higher-yielding products amid falling global interest rates.
It aims to offer annual dividend payments of 4% to 6%, according to the prospectus, while the targeted total return is up to 8%.
Brokers briefed on the plan last week expect the fund to be well received, given Australia’s central bank has cut its cash rate to a record low of 1%, and financial futures are pricing in two further cuts by mid-2020, putting further pressure on bank deposits.
The fund has a primary goal of raising A$750 million which could be increased by 10% if demand is strong, Lane said.
Bookbuilding will run from Oct. 14 to Oct. 31, and the fund, which will have the KKC ticker, is set to begin trading on Nov. 21, according to the prospectus.
Proceeds will be invested in KKR’s existing San Francisco-based Global Credit Opportunities Fund and in the next 2 to 3 years, would also be used to invest in its European Loan fund, the prospectus said.
KKR and its joint venture partners also plan to list Southeast Asian online realtor PropertyGuru Group in Australia this year, people with direct knowledge of the deal told Reuters on Tuesday.
$1 = 1.4736 Australian dollars Reporting by Paulina Duran in Sydney; Editing by Edwina Gibbs