CFA Society Singapore
SINGAPORE (Dec 13): KKR & Co. is buying a stake of as much as $45 million in Barghest Building Performance, a Singapore provider of energy saving solutions, in the private equity firm’s first impact investment globally.
It’s investing as part of a Series B fundraising for BBP, which helps companies throughout Asia reduce electricity consumption. The company plans to use the funds to grow its business in the region, invest in new technology and hire more staff, BBP Chief Executive Officer Poyan Rajamand said in an interview this week.
Global private private equity firms including KKR, TPG and Bain Capital LP have been pushing into impact investing, the idea of seeking both financial return and social benefit. KKR is currently raising funds for investments with this purpose as well as several other strategies, it said on its October earnings call.
TPG plans to start seeking US$3 billion ($4.1 billion) for its second social impact fund this year, while Bain Capital raised US$390 million in 2017 for a fund that focuses on mission-oriented North American companies. Ashish Shastry, KKR’s Southeast Asia head, declined to comment on any impact fundraising by the firm.
BBP, which counts US computer maker HP Inc. and hotelier Shangri-La Asia Ltd. as clients, can help cut a building’s energy consumption by as much as 35%, its website shows. The six-year-old company uses sensors, software algorithms, equipment controls and engineering design to try to cut electricity consumption in air-conditioning systems in commercial and industrial buildings.
It plans to expand to the Philippines and possibly South Korea and Japan, Rajamand said. The company’s existing markets include China, India and Taiwan. BBP could grow its headcount by about half, to 60 people, by the end of next year, he said.
The BBP deal adds to almost US$900 million of investments KKR has announced in Southeast Asia this year, more than double last year’s volume, according to data compiled by Bloomberg. KKR agreed this month to invest as much as $500 million in V3 Group Ltd., the Singapore-based luxury retailer that owns brands including Osim massage chairs and TWG Tea.
It has also pumped $200 million into PropertyGuru Pte, the region’s biggest real estate portal, and took a stake in Philippine technology firm Voyager Innovations Inc.
“We hope that this momentum of investing will be the new normal for KKR in Southeast Asia,” Shastry said in the same interview. “We’re at the beginning of a very interesting time for innovation” in the region.