(Bloomberg) — KKR & Co. is moving its infrastructure and real estate assets under the same leadership as it looks to capitalize on convergence opportunities among its rapidly expanding investment units.
Raj Agrawal will become global head of real assets, adding day-to-day oversight of the real estate business to his current responsibilities as global head of infrastructure, according to an investor letter seen by Bloomberg.
Global head of real estate Ralph Rosenberg will become chairman of real assets. The infrastructure business will continue to report to Agrawal and the real estate business will report to him and Rosenberg.
A KKR spokesman based in New York declined to comment.
The realignment coincides with a growing convergence between infrastructure and real estate, exemplified by the boom in demand for AI-powered data centers. It also shows that many institutional investors treat investment in infrastructure and real estate as part of the same strategy.
The new combined group will be able to pursue logistics, data centers and other areas of “mutual interest,” according to the letter.
KKR's real assets platform will have $157 billion under management through equity and credit. The infrastructure business, which debuted in 2008, has grown to $77 billion as of Sept. 30, from $13 billion five years ago. The real estate business, launched in 2011, has grown to $80 billion from $15 billion in the same period.
Infrastructure business returned 18% during the 12 months ended Sept. 30, making it the firm's top-performing segment. Real estate returned 3% over the same period, lagging behind other asset classes, as higher interest rates and a global shake-up in commercial real estate continued to weigh on business.
KKR's infrastructure and real estate teams participated in the firm's work receive-private transaction for data center owner CyrusOne. Recently, KKR said that, through its infrastructure strategy, it is taking a share at Gulf Data Hub, one of the largest data center firms in the Middle East.
KKR has also included investment in climate-related infrastructure as a growth area with the recently announced acquisition of Dawsongroup, an asset leasing business.