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KKR & Co Inc mentioned on Tuesday it had closed its sixth and largest European non-public fairness fund at $8 billion, a major increase for the funding agency at a time of market volatility and sinking curiosity in main acquisitions.

The fund will goal investments into developed economies in Western Europe, capitalizing on “structural tendencies” reworking the native financial system together with digitisation, sustainability and healthcare, KKR mentioned in an announcement.

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Personal fairness corporations have been compelled to jot down bigger fairness checks for his or her offers as debt financing for world mergers and acquisitions (M&A) dried up amid rising rates of interest, excessive inflation and fears of a recession in main economies.

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Final 12 months, KKR selected to pay for its acquisition of French insurance coverage dealer April Group utilizing solely fairness, with a view to arranging debt financing down the road.

Of the cash raised for its newest fund, $1 billion was dedicated by KKR from its personal stability sheet and worker commitments.

KKR mentioned it’s presently managing somewhat over $28 billion in belongings on its European non-public fairness platform.

“Elevating this fund within the present market setting demonstrates the sturdy investor confidence in our European staff and platform, and our lengthy monitor report of delivering worth and excellent outcomes,” mentioned KKR accomplice Alisa Amarosa Wooden.

International non-public fairness fundraising shrank final 12 months, with the affect significantly felt in Europe, the place there was a 30% decline from 2021, in response to Preqin knowledge.

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Investor capital has flowed in direction of better-known names, with the 25 largest non-public fairness managers concentrating 42% of worldwide fundraising final 12 months, the best annual share since 2013, analysis by consultancy McKinsey & Firm confirmed.

KKR’s fundraising additionally comes at a difficult time for buyout funds seeking to notice current investments, amid a shortage of debt funding and strain on valuations.

The worth of European non-public fairness exits plummeted 51% in 2022 to $78 billion, in response to Preqin.

Regulation agency Debevoise & Plimpton LLP represented KKR as main fund counsel for the fundraising. (Reporting by Bharat Govind Gautam in Bengaluru and Pablo Mayo Cerqueiro in London; Enhancing by Jason Neely, Elisa Martinuzzi and Alexander Smith)