US-headquartered alternative investment firm, KKR, last month announced its acquisition of a 13.33% stake in India-based seed company, Advanta, for $300 million.
The investment was made out of its Global Impact "strategy", which looks to support initiatives that address critical global challenges, the release said. A spokesperson for KKR declined to disclose which fund made the investment.
As of December 31, 2021, KKR had over $25 billion worth of equity investments in climate and environmental sustainability initiatives globally.
Advanta is a subsidiary of Indian multinational, UPL, which acquired it in 2006. KKR declined to comment beyond the release, including on the firm’s shareholding structure following the investment.
Advanta operates in 84 countries across APAC, Europe, the Americas, and Africa, and supplies field crops such as corn, sorghum and rice. The firm’s solutions enhance smallholder farmer productivity and income by guaranteeing higher yields, herbicide resistance and disease tolerance. More broadly, these help to addresses global food production challenges that have been exacerbated by geopolitical disruption, rising populations, reductions in arable land, declining productivity, and climate change, the release explained.
Upon completion of the transaction, Advanta will operate as a standalone platform, while KKR will collaborate with the firm to further expand its business regionally and globally, including through bolt-on acquisitions.
Partnership across private credit
The news of the acquisition was followed by an announcement that same week that KKR had formed a tie-up with UAE sovereign fund, Mubadala Investment Company, to co-invest in performing private credit opportunities across Asia Pacific.
The investors aim to deploy $1 billion of long-term capital. On KKR’s end, this will come from existing investment vehicles, including its inaugural $1.1 billion KKR Asia Credit Opportunities Fund, which it closed in May.
Investments for the partnership will be approved by a board comprising both Mubadala and KKR investment professionals, the spokesperson for KKR confirmed. The contact declined to share how much each party would contribute to the $1 billion earmarked for investment, or on possible exit options for investments under the partnership.
Brian Dillard, partner and head of APAC Credit at KKR, told FinanceAsia: “Ultimately, alongside Mubadala, KKR will have the additional resources to materially increase the size of our investments, pursue more opportunities across Asia, and extend innovative capital solutions to meet the rising demand of borrowers. This partnership is accretive to our ongoing strategy and efforts.”
The partnership will capitalise on opportunities to support businesses emerging from the pandemic who have limited access to capital from banks and non-bank lenders. It will also strengthen Mubadala’s exposure to APAC’s credit market. Currently, Mubadala manages a multi-asset and -sector portfolio of $284 billion.
KKR has deployed $2.7 billion in credit capital in Asia Pacific since 2019, including acquisition financing and bespoke capital solutions for companies and financial sponsors in the environmental services, real estate, education, infrastructure and healthcare sectors.
KKR Credit is active in regional markets including Australia, Greater China, India, Korea, Malaysia, New Zealand, Singapore, and Vietnam. Globally, it has approximately $178 billion in assets under management in the asset class.
Other alternative investment firms eyeing Asia’s private credit market include Blackstone, which in May 2022, announced plans to expand its private credit platform to $5 billion, from $500 million, in the “near term”. US alternative investor, Apollo, in June partnered superannuation fund, Hostplus, to launch a $1.25 billion APAC credit strategy.
