(Bloomberg) — KKR & Co. is moving its infrastructure and real estate assets under the same leadership as it looks to capitalize on converging opportunities between the rapidly expanding investing units.
Raj Agrawal will become global head of real assets, adding day-to-day supervision 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 reporting to Agrawal, and the real estate business will report to both him and Rosenberg.
A spokesperson for New York-based KKR declined to comment.
The reorganization coincides with a growing convergence between infrastructure and real estate, exemplified by the boom in demand for data centers that power artificial intelligence. It also shows that many institutional investors treat infrastructure and real estate investing as part of the same strategy.
The newly combined group will be able to pursue logisitcs, data centers and other areas of “mutual interest,” according to the letter.
KKR’s real assets platform will have $157 billion under management across equity and credit. The infrastructure business, which debuted in 2008, has grown to $77 billion as of Sept. 30, up from $13 billion five years ago. The real estate business, started in 2011, has grown to $80 billion from $15 billion over the same period.
The 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 shakeout in commercial real estate continued to weigh on the business.
KKR’s infrastructure and real estate teams both participated in the firm’s take-private transaction for data-center owner CyrusOne. More recently, KKR said that, through its infrastructure strategy, it’s taking a stake in Gulf Data Hub, one of the Middle East’s largest data-center firms.
KKR has also homed in on climate-related infrastructure investing as a growth area with the newly announced acquisition of Dawsongroup, an asset-leasing business.