Private equity firm KKR is looking to invest $17 billion in infrastructure projects worldwide, focusing on broadband, in particular.
The U.S. and other wealthy countries are already devoting a substantial amount of money to improving infrastructure, but KKR doesn’t think it’s enough. “Global demand for building and upgrading critical infrastructure, as well as supporting responsible energy transition and growing broadband access, requires funding far in excess of public sources,” said Brandon Freiman, KKR’s Head of North American Infrastructure. That’s where private equity comes in.
Although the newly created fund will look at global investments, it plans to focus on investments in OECD countries in North America and Western Europe.
Historically, KKR has been interested in fiber and fixed wireless access technologies, but it remains unclear just how much it will devote to broadband investments.
KKR acquired a majority stake in German fiber-to-the-home company Deutsche Glasfaser in 2015, which it then sold in 2020 for $2.74 billion. It acquired a majority stake in Hyperoptic, a U.K. residential fiber provider, in 2019.
KKR has made a number of moves in the fiber space, particularly in the past year. It purchased Telefonica Chile’s wholesale fiber unit in February and also launched Open Dutch Fiber in the Netherlands. In April of last year, KKR finalized a deal to acquire a 37.5% stake in Telecom Italia’s FiberCop and also invested an undisclosed amount in the U.S. fiber company MetroNet. In July, it teamed up with Telefonica to launch an open access fiber company in Colombia.
KKR’s current fund, Global Infrastructure Fund (GIF) IV, is more than twice the size of its predecessor, GIF III, which closed at $7.4 billion in 2018. Each successive KKR fund has raised more than double the previous one. Its first Global Infrastructure Fund, created in 2008, closed fundraising in 2012 at $1 billion. GIF II then closed in 2015 with $3.1 billion. The current iteration will primarily look to invest in assets with strong pre-existing cash flows and reinvestment opportunities for growth.