KKR is gearing up for a final close of its debut global climate transition fund at up to USD 5bn by the end of this year, two sources familiar with the situation said.

The investment vehicle, KKR Global Climate Transition Fund, which launched in 2023, hit an initial close at nearly USD 3bn in 2024 but experienced sluggish fundraising last year amid a wider fundraising slowdown, said one of the sources.

The fund was expected to raise between USD 6bn and USD 7bn, Infralogic previously reported, although KKR has never revealed a target or hard cap for the vehicle.

KKR declined to comment for the article.

The strategy focuses on renewables, transportation, and decarbonisation in the US, Western Europe and the Asia Pacific markets with cheques ranging from USD 300m to USD 750m, Infralogic previously reported. The Global Climate Transition Fund has a 12-year lifespan and targets high-teens IRRs.

It is co-led by partners Emmanuel Lagarrigue and Charlie Gailliot, both based in New York, and Neil Arora, who leads the strategy in Asia from Singapore.

Since its launch, the fund has made eight investments across the UK, Europe, Australia, and India. These include UK battery energy storage system (BESS) and EV transport company Zenobē; German energy service provider EGC; UK-based vehicles and industrial solutions leasing company Dawsongroup and the US solar and BESS developer Avantus; and Spanish industrial decarbonisation platform IGNIS P2X.

In Australia, the fund has invested in a solar and storage systems company CleanPeak Energy and HMC Capital’s energy transition platform, while this year it announced an investment in India’s EV maker PMI Electro Mobility and its e-bus platform Allfleet.

The fund is backed by LPs such as Spanish bank BBVA, which committed USD 200m to the fund in 2024, and from the UAE-based USD 30bn climate investment fund ALTÉRRA this year.

KKR has also launched a parallel Asia-dedicated climate vehicle. The Asia Climate Fund, which has a target of up to USD 1bn is structured as a separately managed account.