Broadband appears to be on the list of priorities for private equity firm KKR as it looks to invest $17 billion from a newly created fund in infrastructure projects across the globe.
Countries like the U.S. are already pouring a significant amount of money into improving infrastructure. But KKR’s head of North American Infrastructure Brandon Freiman said in a statement “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.” That’s where private equity comes in, he said.
Though the fund will look at global investments, it plans to focus on opportunities in countries in North American and Western Europe which are part of the Organization for Economic Co-operation and Development. It will predominantly look to invest in assets which already have strong existing cash flows and attractive reinvestment opportunities for growth.
KKR’s Global Infrastructure Fund (GIF) IV is more than twice the size of its predecessor, GIF III, which closed at $7.4 billion in 2018. KKR created its first Global Infrastructure Fund in 2008, which closed fundraising in 2012 at $1 billion. GIF II closed in 2015 with $3.1 billion in funding.
It is unclear just how much money KKR plans to pump into broadband investments as opposed to other types of projects. However, the company has historically been interested in fiber and fixed wireless access technologies.
In 2015, KKR acquired a majority stake in German fiber-to-the-home company Deutsche Glasfaser, which it sold to investment firms EQT and OMERS for $2.74 billion in 2020. It picked up a majority stake in U.K. residential fiber provider Hyperoptic in late 2019.
Last year, KKR made a number of additional moves in the fiber space, purchasing Telefonica Chile’s wholesale fiber unit in February and launching Open Dutch Fiber in the Netherlands alongside Deutsche Telekom Capital Partners using money from its GIF.
In April 2021, KKR finalized a deal to acquire a 37.5% stake in Telecom Italia’s fiber joint venture FiberCop and also invested an undisclosed sum in U.S. fiber company MetroNet. It followed up in July by teaming with Telefonica to launch an open access fiber company in Colombia.
KKR has also previously invested in companies including India’s Reliance Jio Platforms and U.S. fixed wireless access broadband provider Starry.