KKR Rebalances Water Portfolio

25 Oct 2016
Available with corporate subscription

On 2 October 2016, US investment firm Kohlberg Kravis Roberts & Co L.P. (KKR) sold its remaining 23.85% share of wastewater treatment firm CITIC United Envirotech Limited (UEL) for US$281.2 million to Cayman Islands-based China Reform Puissance Overseas GP.

Bluefield anticipated this move as KKR funded UEL’s initial growth. UEL is one of China’s ten largest private wastewater treatment plant operators with three business lines including EPC services, infrastructure investment, and membrane bioreactor supply.

KKR Water Portfolio
KKR Rebalances Water Portfolio (Research Note)

In this Research Note, Bluefield water experts analyze the impact of this move on the company’s strategy — including their assets in the UK and experience in the US PPP Market.

Following this exit from UEL, KKR is repositioning in China.  While China continues to see growth, concerns surrounding market transparency and macroeconomic trends remain as China rolls out its Five Year Plan that will favor publicly- participated wastewater players.

Bluefield Takeaways

  • KKR repositions in China following UEL exit.
  • KKR hedges UK market challenges, Mitsubishi gains Europe private utility experience with South Staffordshire deal.
  • KKR navigates burgeoning US PPP market moving on the learning curve.