KKR & CO. L.P. 
DUBLIN (Reuters) - U.S. private equity firm KKR & Co LP (>> KKR & Co. L.P.) and Ireland's new strategic investment fund will launch a 500 million euro ($552 million) joint venture to provide credit for builders amid a severe housing shortage.
A rapid recovery from a housing crash in which prices halved between 2007 and 2010 has slowed in recent months, but delays in addressing shortages, particularly in Dublin, is keeping upward pressure on prices and stretching affordability for buyers.
With Irish banks reluctant to lend much more than 65 to 70 percent of the total financing requirement for projects, the venture named Activate Capital will provide home-building companies with loans for up to 90 percent of costs.
The Ireland Strategic Investment Fund (ISIF), mandated to invest into the economy the 7 billion euros left in the country's old pensions reserve fund, will contribute 325 million euros towards the project, its biggest single investment so far.
KKR, which like other funds such as Cerberus [CBS.UL], Lone Star and Blackstone (>> Blackstone Group LP) are seeking to cash in on Ireland's fast recovering economy through investing in the property market, will provide the remaining 175 million euros.
After building 93,000 new houses in 2006 at the height of a property bubble fueled by reckless lending, just 9,500 new units have been built a year over the last four years.
That compares with an average 23,000 during the 1970s, when Ireland was a much poorer country.
In Dublin, which has led the economic recovery, just over 1,300 properties were completed in the first six months of the year, official figures showed on Monday.
Activate would be able to finance building more than 11,000 new homes, ISIF and KKR said.
Ireland's government has also promised to scale back some of the building regulations it introduced which Finance Minister Michael Noonan said had proven overly-rigorous on developers.
($1 = 0.9060 euros)
(Editing by David Holmes)
By Padraic Halpin
