KKR, a leading global investment firm, announced the final close of the KKR Opportunistic Real Estate Credit Fund II (“ROX II”), a strategy dedicated to opportunistic investments in senior loans and real estate securities in the U.S. and Western Europe. Closed commitments to the comingled fund and separate accounts pursuing KKR’s Opportunistic Real Estate Credit Strategy total over $850 million.
ROX II is KKR’s flagship private fund investing across the full breadth of KKR Real Estate Credit’s opportunistic capabilities. The strategy has a flexible mandate to pursue attractive risk-adjusted returns across both loans and securities. Loan originations will focus on first mortgages secured by high-quality properties owned by institutional sponsors and located in major markets within the United States and Western Europe. KKR has established a leading franchise over the past decade as a mortgage lender of choice to top sponsors. Securities investments will leverage KKR’s position as the largest third-party purchaser of risk retention CMBS B-Pieces, as well as K-Star, KKR’s dedicated special servicer.
“We believe it is a great time to invest real estate credit. The asset class offers attractive absolute and relative returns, underpinned by the opportunity to lend on high-quality, well-located assets at conservative leverage levels on re-set property values,” said Matt Salem, Partner and Head of Real Estate Credit at KKR. “We have designed our ROX II strategy with a flexible mandate to participate in what we view as the best risk-adjusted opportunities we see across our platform, with the objective of delivering attractive returns coupled with significant current income and a focus on downside protection.”
“Our extensive borrower relationships, built over the past decade, have enabled us to continue our disciplined deployment into an attractive market,” said Joel Traut, Partner and Head of Originations for Real Estate Credit at KKR. “We believe private capital will play an increasingly important role in the commercial real estate market as loan demand continues to climb, and this positions us very well to deliver attractive risk-adjusted opportunities for our investors.”
KKR’s global real estate business invests thematically in high-quality real estate through a full range of scaled equity and debt strategies. KKR’s more than 140 dedicated real estate investment and asset management professionals across 16 offices apply the capabilities and knowledge of KKR’s global platform to deliver outcomes for clients and investors. Since 2015, KKR’s real estate credit strategy has originated $43.4 billion of loans and invested $14 billion in commercial mortgage-backed securities (CMBS).
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