Seeks to Purchase Junior Tranches of New Issue CMBS In Compliance
with Risk Retention Rules
NEW YORK--(BUSINESS WIRE)--
KKR, a leading global investment firm, today announced the final closing
of KKR Real Estate Credit Opportunity Partners ("RECOP" or "the Fund"),
a $1.1 billion fund focused on generating attractive risk-adjusted
returns for investors through the purchase of junior tranches of
commercial mortgage-backed securities (CMBS) (the "CMBS B-Piece").
RECOP focuses primarily on investing in newly-issued CMBS B-Pieces as an
eligible third party purchaser subject to the new risk retention
regulations which took effect in December 2016. Earlier this year, KKR
negotiated and purchased the first CMBS transaction subject to risk
retention. The Fund has since closed on six additional transactions
representing a face amount of $517 million and approximately $225
million of invested equity, in aggregate. The Fund's seven closed
investments through August 2017 make it the most active CMBS B-Piece
buyer of third party risk retention structures.
KKR's Real Estate Credit business, co-headed by Chris Lee and Matt
Salem, was established in 2015 to invest across the commercial real
estate debt spectrum and offer financing solutions to commercial
property owners. The 15-person team of investment professionals has
long-standing relationships with issuers and borrowers, expansive
underwriting capabilities, and expertise across property types and
RECOP exceeded its target capital raise and received strong backing from
a diverse group of global investors, including public pensions,
insurance companies, and family offices.
Matt Salem, co-Head of KKR's Real Estate Credit business, said: "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. We believe our long-dated capital
offers a compelling risk retention solution while also generating
attractive returns for our investors. In addition, the Fund will benefit
from KKR's extensive relationships with major CMBS issuers and our
integrated ‘one-firm' approach to underwriting."
Ralph Rosenberg, Global Head of Real Estate for KKR, said: "This
demonstrates the power of our integrated real estate platform. We are
pleased to have received the backing of so many investors as the CMBS
market has transitioned over the past year."
Since launching a dedicated real estate platform in 2011, KKR has
invested or committed over $4.5 billion in capital across more than 60
real estate transactions in the U.S., Europe and Asia as of June 30,
2017. The global real estate team consists of over 50 dedicated
KKR is a leading global investment firm that manages multiple
alternative asset classes, including private equity, energy,
infrastructure, real estate, credit and, through its strategic partners,
hedge funds. KKR aims to generate attractive investment returns by
following a patient and disciplined investment approach, employing
world-class people, and driving growth and value creation with KKR
portfolio companies. KKR invests its own capital alongside its partners'
capital and provides financing solutions and investment opportunities
through its capital markets business. References to KKR's investments
may include the activities of its sponsored funds. For additional
information about KKR & Co. L.P. (NYSE: KKR), please visit KKR's website
and on Twitter @KKR_Co.
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Kristi Huller or Cara Kleiman, 212-750-8300
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