The demand for AI infrastructure is strong! KKR (KKR.US) has successfully raised a record $19.2 billion for its infrastructure fund, fully betting on data centers and energy transformation.

KKR & Co. (KKR.US) has raised the largest infrastructure fund in the company's history, aimed at seizing opportunities in the data center and related asset sectors. The company stated in a declaration on Monday that the KKR Global Infrastructure Investors V fund has raised $19.2 billion, primarily investing in North America and Western Europe. The fund has committed to invest over $9 billion. Raj Agrawal, KKR's global head of real assets, expressed in an interview, "In the current financing environment, we often hear about tight capital allocations and fund managers struggling. We are incredibly pleased with the success of this fund's fundraising. We have expanded our platform and believe we have consistently increased our market share." According to Agrawal, the company began its infrastructure business during the 2008 financial crisis and completed fundraising for its first fund in 2012. He stated that since then, the company has focused on capital preservation in various environments and has accumulated approximately $120 billion in assets. He mentioned that KKR took advantage of the public market downturn during the pandemic to achieve above-average returns, attracting investor interest. Agrawal noted that for this new pool of capitalKKR's fifth infrastructure fundthe company sees three key investment areas: digital assets (such as data centers and fiber optics), energy transition, and storage and logistics. The fund has made nine investments, including the acquisition of the North American subsidiary of renewable energy producer EDF Power Solutions Inc. It has also invested in European data center company Global Technical Realty and a plane leasing project in collaboration with Altavair LP. Strategic partnerships are also a focus for KKR, with 50% of its infrastructure deals conducted through corporate collaborations. Despite concerns about data centers and artificial intelligence, KKR believes that the demand for infrastructure assets capable of supporting the growth of the largest hyperscale data centers is "very, very real," Agrawal stated. He said, "Any product we can offer and deliver in the next two or three years, or even four, will be snapped up. If you can deliver products reliably and with confidence, you can sell them at a high price." Agrawal mentioned that KKR will not invest in assets with contract durations of five to seven years. He also pointed out that KKR will avoid acquiring digital infrastructure assets valued at around 30 times earnings, as these assets need significant growth to avoid losses. He indicated that the market has not yet fully recognized the quality differences between various assets. For instance, data centers focused on AI inference with capacities of hundreds of megawatts are safer than those centered on model training with capacities of 2 to 3 gigawatts. He also noted that KKR prefers to invest in data centers that serve multiple clients rather than assets tailored for a single hyperscale data center operator. Agrawal stated, "Currently the market pricing for them is very close. This might work during market booms when everything is going well. However, in downturns, we believe the market will differentiate pricing." Nonetheless, KKR believes that there are significant opportunities arising from increased demand for data centers and related AI infrastructure, which has also prompted the establishment of Helix Digital Infrastructure Company earlier this year. Agrawal said, "We can hardly keep up. There are too many opportunities."