Myth #2: Investing in Asia Pacific Infrastructure is Inherently Riskier
Our view: Geography can introduce risk, but deep local expertise helps us mitigate it. We therefore invest only in markets where we have an established presence and focus on infrastructure businesses supported by contracted revenues, investment-grade counterparties, and essential assets.
Many investors associate parts of Asia Pacific with higher volatility, but our experience is that portfolio construction matters more than geography alone.
At KKR, we evaluate infrastructure opportunities along a risk-reward spectrum, with each opportunity representing a distinct profile, based on factors such as geography, business maturity, and cash-flow structure.
Core investments typically consist of mature, cash-yielding businesses in developed OECD markets, supported by regulated or contracted revenues that provide greater visibility into future cash flows. Core Plus investments retain many of those characteristics but provide additional opportunities for value creation through active asset management, operational improvements, or enhancements to contractual arrangements.
Rather than taking both country and asset risks, we typically seek to offset one with the other. In the markets with higher perceived geographic uncertainty, such as India and the Philippines, we generally focus on lower-risk, core infrastructure assets with resilient, contracted cash flows.
In more developed markets such as Japan, Korea, and Australia, where country risk is lower, we have greater flexibility to pursue core-plus opportunities.
Pinnacle Towers illustrates this approach. Pinnacle is an independent telecommunications tower company in the Philippines focused primarily on developing build-to-suit towers underpinned by long-term (10-15 years) contracts with fixed pricing and creditworthy, regulated counterparties. While Pinnacle operates in a developing market, its underlying cash flows are substantially de-risked through long-term, inflation-protected contracts with leading local telecommunications companies.
Conversely, KKR’s investment in Queensland Airports Limited (“QAL”), a portfolio of four airports in Queensland, Australia, demonstrates how we can take a different approach in developed markets. In Australia, Japan or Korea, where the broader market environment is more mature and country risk is lower, KKR was able to pursue a Core Plus investment with greater operational complexity and transformation opportunities. KKR’s key priorities for this investment include increasing domestic and international passenger traffic, maximizing non-aero revenue and unlocking its sizeable industrial real estate portfolio. The value creation plan includes optimizing the value of new airports, car parks, and vacant property.
Together, these investments demonstrate how we seek to construct risk differently across markets — emphasizing greater contractual protection where geographic uncertainty is higher, while selectively taking more asset-level or operational risk in developed markets.
KKR subsequently completed a partial monetization of Pinnacle through the sale of a 25% stake, demonstrating not only how thoughtful structuring can mitigate asset-level risk in developing markets, but also the depth of potential exit opportunities — bringing us to Myth #3 below.
Takeaway: Investment risk should be assessed at both the asset level and the country level.
Myth #3: Exiting Investments Across Certain Asia Pacific Markets is Difficult
Our view: Exit opportunities across our target markets are broader and deeper than many investors appreciate, supported by a mature and increasingly diverse buyer ecosystem.
A common perception is that infrastructure exits in parts of the Asia Pacific region are constrained by a limited buyer universe. Our experience offers a different reality. Today, infrastructure assets can be monetized through a broad and growing buyer universe including public markets, domestic financial sponsors, global pension funds, sovereign wealth funds, strategic acquirers, and infrastructure specialists.
Developed markets such as Australia, Korea and Japan have long benefited from deep capital markets. We are also seeing significant growth and capital inflows in other markets. For example, India now has the world’s fifth largest listed equity market1 with approximately $5 trillion of market capitalization and a growing domestic investor base.
To date, within our Asia Pacific Infrastructure strategy, we have exited multiple investments across both developing and developed markets – including, but not limited to, renewable energy in India, telecommunications towers in the Philippines, waste management in Korea, and chemical storage in Japan.
These realizations demonstrate that investing in the region does not inherently mean constrained liquidity. With high-quality assets, appropriate structuring and deep local relationships, there can be multiple pathways to monetization across the Asia Pacific region.
Takeaway: Asia Pacific infrastructure is no longer just a growth story — it is also a story of demonstrated exits and proven distributions.
Myth #4: Investing in Asia Pacific Infrastructure Means Taking Excessive Greenfield Development Risk
Our view: We do not take large greenfield construction risk. Most opportunities we pursue involve operating businesses or established platforms. Where some development is required, we seek to mitigate risk through disciplined structuring and long-term contractual protections.
We are much more likely to evaluate opportunities involving existing infrastructure businesses with operational track records rather than speculative greenfield development. Across our five core markets in Asia, 39% of infrastructure deal flows over the last 5 years carried greenfield risk, according to Infralogic, broadly comparable to the 44% in North America and 36% in Europe.2
Where development forms part of the investment thesis, we focus on committed customers, contracted revenues, phased capital deployment, experienced local execution, and disciplined project selection.
Serentica demonstrates this philosophy. The India-based platform develops renewable energy and energy storage assets supported by long-term, take-or-pay power purchase agreements with large investment grade industrial customers. Rather than building capacity in anticipation of demand, Serentica scales projects against clearly identified customer requirements.
For us, greenfield development does not have to mean speculative development and corresponding risk. When supported by contracted revenues, committed customers, disciplined capital deployment, and experienced local execution, development risk can often be substantially reduced while still creating attractive investment opportunities.
Takeaway: Development does not define investment risk – investment structure does.
Myth #5: The Best Infrastructure Opportunities in the Region Have Already Been Found
Our view: The Asia Pacific infrastructure opportunity set continues to expand as the region’s economies evolve. Long-term structural growth and rising infrastructure demand continue to create one of the world’s largest and most dynamic opportunity sets.
A common perception is that the most attractive infrastructure assets across Asia Pacific have already been acquired, leaving investors to compete over a shrinking pool of opportunities.
In reality, today’s opportunity is reinforced by a significant imbalance between infrastructure demand and available capital. According to the Asian Development Bank, Asia alone requires approximately $1.7 trillion of infrastructure investment annually, compared with current investment of roughly $0.9 trillion, representing an annual funding gap of approximately $800 billion. Importantly, these estimates exclude developed markets such as Japan, South Korea, and Australia, which continue to generate significant infrastructure investment opportunities of their own. Asia Pacific is currently only 11% of global infrastructure transaction volumes, according to Infralogic3, even though the region accounts for 46% of world GDP, according to the IMF.4
The opportunity set continues to expand across multiple themes. Approximately 55% of global internet traffic originates in Asia, yet roughly 70% of the world’s data center capacity remains concentrated in the United States, highlighting the scale of future digital infrastructure investment. Rising electricity demand, decarbonization, energy security, and corporate transformation continue to create opportunities across power, renewables, transmission, transportation, environmental infrastructure, and corporate carve-outs.
Many global investors also remain under-allocated to Asia Pacific despite its compelling long-term fundamentals, creating an attractive backdrop for investors with deep local capabilities and a long-term investment horizon.
Takeaway: The opportunity set is not shrinking – it is continually being replenished.
Conclusion: Local Expertise Drives Global Opportunities
Successful infrastructure investing in Asia Pacific is not about making broad macroeconomic calls. It is about understanding individual markets, identifying long-term demand drivers, and partnering with local stakeholders to build critical infrastructure.
Our conviction is reflected in our own capital allocation. Approximately 15% of KKR’s balance sheet is invested across Asia Pacific today, with an objective of increasing that allocation to 30% over time.
We believe Asia Pacific remains one of the world’s most compelling infrastructure investment regions. The challenge is no longer whether the opportunity exists—but whether investors have the local capabilities and relationships to access the highest-quality investments.
