KKR, GIC partner for real estate structured lending solutions in India

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Multinational private equity fund KKR & Co. L.P. on Thursday said that it has established a non-banking financial company (NBFC) that will provide structured credit solutions to the real estate sector in India, with an investment from GIC, Singapore’s sovereign wealth fund.

This is KKR’s second NBFC in India. In 2009, it had set up KKR India Financial Services Pvt. Ltd, offering debt finance to Indian corporations.

“The launch of the India-focused NBFC marks a milestone for our global real estate platform and we are thrilled to bring long-term capital to India’s real estate sector,” said Ralph Rosenberg, global head of KKR Real Estate, in a media statement.

 “We are excited to assist a sector that is still under-built. While many lenders provide debt to this sector, there is a need for solution-oriented, non-dilutive capital for property developers. We intend to fill that gap and contribute to the continued development of India’s residential and commercial real estate sectors,” Rosenberg further stated.

During 2014, KKR initiated the real estate business in India by structuring and participating in three transactions with an aggregate amount of about $190 million.

KKR is one of the private equity firms in India that has pioneered the model of offering flexibility in deal structures to cater to the requirements of Indian promoters. It provides capital through equity, debt, mezzanine (a hybrid of debt and equity) or convertible securities.

Since 2009, KKR has infused more than $2 billion structured financing to 21 business groups in India through its credit and capital markets businesses.

“This sector-focused NBFC further enables KKR to provide tailored financing solutions to companies and adds to our established private equity and lending businesses in India,” added Sanjay Nayar, chief executive of KKR India.

In private equity, KKR has been active in India since 2006 with total equity investments exceeding $1.5 billion.

Since launching a dedicated real estate platform in 2011, KKR has committed over US$1.8 billion of equity to 29 real estate transactions in the US, Europe and Asia respectively.