Ireland Strategic Investment Fund Announces €500M Home-Building Finance Joint Venture with Leading Global Investment Firm KKR
- ISIF and KKR Credit establish
Activate Capitallending platform
- Move will provide urgently needed long-term capital to address housing supply shortage, with capacity to fund over 11,000 new homes
- ISIF's biggest single investment to date
- Construction will create an average of 1,900 new full-time jobs per annum
- Meets ISIF's "double bottom line" criteria of commercial return and economic impact
As a large and labour intensive sector, recovery in the construction industry will be critical to the realisation of further employment gains in
The ISIF will contribute €325 million towards the joint venture, making it the biggest single investment yet undertaken by the ISIF. KKR will provide the remaining €175 million.
Capnua Corporate Finance and Dan O'Connor developed the
"Today's launch of the joint venture between the
"The announcement is a win-win for the State from all perspectives: economically, we are increasing activity in the housing sector, which is vital for our economic competitiveness and long term growth prospects; financially, we are generating a commercial financial return for the
"Demand for housing is significant and this fund will stimulate activity in the sector. Construction is still below what we might consider normal levels and with very significant housing pressures, this will give the sector an important boost and shows that it's a safe place to invest.
"Many builders and developers are reporting difficulties accessing finance for building projects so this investment is hugely significant."
ISIF Head of Private Equity Fergal McAleavey said:
"There is a significant mismatch between the demand for quality new homes in
"Our joint venture will help to address this by providing funding on a commercial basis to development projects that are capable of delivering over 11,000 new homes.
"This will meet the ISIF's ‘double bottom line' criteria of achieving commercial returns while delivering a significant economic impact - in this case by providing crucial infrastructure that
"With this joint venture, we are also establishing a major new non-bank lending platform which can continue to provide financing to the sector for many years to come. This will bring additional benefits to the Irish economy in the form of increased lending capacity and increased competition in the market for residential development lending."
"This is about supporting the strong recovery underway in the Irish economy, by providing for the housing needs of Ireland's growing population and expanding workforce.
"The combination of our firm's significant presence in
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Notes to editors
About the ISIF
- The €7.6 billion ISIF was established in
December 2014with a statutory mandate to invest on a commercial basis in a manner designed to support economic activity and employment in the State. The fund has made investment commitments to date of €1.5 billion (including National Pensions Reserve Fundinvestments prior to December 2014when the ISIF was established and NPRF assets transferred to it) and plans to deploy the remainder over the coming years as suitable investment opportunities are identified.
- KKR is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and 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 at the asset level. KKR invests its own capital alongside its partners' capital and brings opportunities to others 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 at www.kkr.com.
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