The new division will receive funding of $580m, 45% of which will be derived from KKR’s own balance sheet, its mid-market banking unit and $150m from publicly traded KKR Financial Holdings (KFN). The move is slated to fill the gap left behind by European banks, which withdrew from the shipping industry extensively after the recession in 2008.
"This is an area that has historically been served by European banks,” said Kristan Bodden, ceo of Maritime Finance. “The current dislocation in the European banking sector has created a substantial funding gap in maritime asset financing. With Maritime Finance, we are capitalising on an opportunity to fill an obvious void while at the same time aiming to provide compelling returns and attractive yields for our investors."
Citing AMA Capital partners, KKR reports that at least $220bn of debt capital is required to shore up the maritime sector through the end of 2014. “Total offshore and shipping orderbooks are valued at $238bn at cost and the lack of financing is impacting orderbook growth beyond 2016,” a company statement read.
Founded in 1976 and led by Henry Kravis and George Roberts, KKR has $83.5bn in assets under management as of June 30, 2013.
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