KKR Raises $4 Billion to Invest in High-Growth Health-Care Firms

(Bloomberg) -- KKR & Co. has raised $4 billion for its second fund focused on investing in high-growth health-care companies. 

KKR invested about $500 million in the KKR Health Care Strategic Growth Fund II alongside new and existing investors, according to a statement reviewed by Bloomberg News. KKR is the largest investor in the fund. 

The new fund is three times larger than the predecessor fund that closed in 2017 and will primarily focus on North America and Europe.

The fund will seek to invest in “health care companies with proven products and services that are seeking a partner to commercialize and scale,” according to the statement on the fund closing. That will include the biopharmaceutical, medical device, health-care services, life science tools and diagnostics and health-care technology sectors.

“We’re looking at innovative businesses that we can grow and scale,” Ali Satvat, the KKR partner who oversees the strategy, said in an interview. The fund generally will invest in companies with above-market growth, which “in most cases is double-digit revenue growth” though the numbers vary by sector, he said.

The added firepower could allow KKR to cut bigger equity checks, invest in larger companies and hold investments for longer. KKR expects its average equity investment to range from $75 million to $200 million, though it will have the flexibility to go beyond that, according to a person familiar with the matter. 

“Pandemics shine a light on human health, preventative health, diagnostic health and this idea that there’s innovation in health care, which has a continuing set of needs that need to be addressed,” Satvat said.

KKR has invested $18 billion across health care since 2004 and has about 35 people dedicated to investing in the sector. It has already closed several deals through the new fund, including its 2021 investments in Geode Health and Cordis.

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