2010-07-15 15:11

KKR & Co, whose shares will start trading on the New York Stock Exchange today, is seeking to raise $800 million to invest in China, Asia's biggest private-equity market, two people with knowledge of the matter said.

The KKR China Fund will focus on growth-capital investments, the people said, asking not to be identified because the information is private. Richard Barton, a Hong Kong-based spokesman at KKR's public relations firm Kreab Gavin Anderson, declined to comment.

New York-based KKR joins Blackstone Group LP and Carlyle Group, the world's biggest private-equity firms, in targeting investments in China as the country's economic growth has outpaced the rest of the world. China-focused funds accounted for about 70 percent of the private-equity capital raised in Asia in the first half of the year, said Kathleen Ng, managing director at the Center for Asia Private Equity Research Ltd in Hong Kong.

"China is such a central part of the overall private equity market," Ng said today. "It's a natural development for all the global firms that need to come into the Asia market."

Carlyle's plan

New York-based Blackstone was the first global private-equity firm to set up a 5 billion yuan ($738 million) fund with the Shanghai government in August to target investments in the eastern coastal city and neighboring areas.

Washington-based Carlyle, the world's second-biggest private-equity firm, announced in February a yuan-denominated fund with Fosun Group, a Chinese privately owned company whose businesses span steel, mining and property. Carlyle is also planning a domestic Chinese private-equity fund with the Beijing government.

China's economic growth eased to 11.1 percent in the first half after the government succeeded in tempering credit expansion, investment spending and property speculation.

KKR is moving its listing to the more liquid New York Stock Exchange from Amsterdam. KKR initially filed to sell shares weeks before the global credit crisis crippled equity and debt markets in 2007. It scrapped that plan, opting to merge with its publicly traded European fund, a combination that was completed last year.

A US listing clears the way for KKR to issue additional stock and enables firm insiders to eventually cash out their stakes if they so choose.