KKR plans to hike investment in technology, consumer sector

Private equity investment firm KKR & Co plans to boost investment in China with a focus on technology and consumer-related sectors, according to a senior executive of the firm.

The latest evidence is the US firm's investment in four Chinese companies that specialize in digital marketing, advertisement, brand management and data analysis. The investment came from KKR's third Asian fund of $9.3 billion, but it did not disclose the exact value of the investment.

While retaining their own brands, the four local companies backed by KKR will form a digital marketing group known as Cue & Co. Its business involves helping retailers to pool and analyze online and offline consumer data and information and to achieve targeted marketing.

The group will be serving clients including consumer brands, financial institutions, gaming companies and internet service providers, according to a company release.

Paul Yang, CEO for China affairs at KKR, said the firm, which already has extensive investment in China's food and agricultural technology sectors, will seek more opportunities in sectors such as consumption, advanced manufacturing, healthcare and financial technology in the future.

Yang said that digital marketing is a rapidly emerging sector with big growth potential along the trend of a more sophisticated consumption in China.

"We are strong believers in the digital transformation in China. Internet and mobile consumption is rising steadily and ad spending in China continues to shift toward digital formats at an unprecedented speed," Yang said.

In 2016, the value of such investment reached 300 billion yuan ($47.4 billion) with an annual growth rate of 40 percent, according to Yang.

Shi Kan, CEO of Cue & Co, said that the group formed by the four companies will leverage KKR's expertise across different industries and will utilize the resources in technology and media business to support its clients in China's rapidly evolving digital marketing industry.

KKR has been investing in China since 2007 and has deployed more than $3.3 billion to support leading Chinese companies and entrepreneurs through its private equity platform.