SINGAPORE (BLOOMBERG) - KKR & Co is buying a stake of as much as $45 million in Barghest Building Performance (BBP), 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 by digitising air-conditioning systems. The company plans to use the funds to grow its business in the region, invest in new technology and hire more staff, according to BBP chief executive officer Poyan Rajamand.
"Customers come to us because our solution allows them to save energy today," Mr Rajamand said in an interview on Thursday (Dec 13) with Bloomberg Television. "With advanced analytics that we have at the back end, we can help them save more and more, year after year."
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 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 South-east Asia head, declined to comment on any impact fundraising by the firm.
BBP, which counts chipmaker Micron Technology Inc and hotelier Shangri-La Asia as clients, can help cut a building's energy consumption by as much as 40 per cent, Mr Rajamand said. 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, Mr Rajamand told Bloomberg earlier this week. 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 South-east 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 S$500 million in V3 Group, the Singapore-based luxury retailer that owns brands including Osim massage chairs and TWG Tea.
It has also pumped $200 million into PropertyGuru, 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 South-east Asia," KKR's Shastry said. "We're at the beginning of a very interesting time for innovation" in the region.