Kohlberg Kravis Roberts has invested more than 60 per cent of its new $17.5bn global buy-out fund, which it only finished raising at the end of last year.

However, the buy-out firm, co-founded by Henry Kravis and George Roberts, is said by investors to have delayed the start of fundraising for its next fund from this year, as its investment pace has dropped sharply since the credit squeeze began last summer.

KKR was one of the most aggressive practitioners of the “mega buy-out” before last summer’s crisis in debt markets, snapping up several multi-billion dollar companies, including First Data, US Foodservice, Alliance Boots, and Dollar General.

Since then the firm has switched to investing in minority stakes, emerging markets and smaller deals. It spent almost $7bn in the fourth quarter alone, including the €910m ($1.4bn) buy-out of a Turkish shipping group and the £593m ($1.2bn) purchase of a UK software firm.

The scale of its fund-raising, close to its $18bn “hard cap” limit, shows that institutional investors still have a strong appetite to invest in “mega buy-out” firms, even though the debt crisis means that such deals have become impossible.

KKR has also raised more than €4bn for its new European buy-out fund in a first close in January, progressing towards the €6bn target for that fund.

Separately, KKR Financial, the listed unit of KKR, this week laid to rest its ill-timed enture into the mortgage business and announced that it had completed the painful transformation into becoming an investor focused purely on corporate debt.

In addition, KKR Financial said that it planned to raise $250m and that it was activating a $1.6bn financing facility from Dresdner Bank that would be used to pay down short-term debt and to invest in corporate credit.

KKR Financial now has a total of almost $3bn, of which about half will go into acquiring corporate debt.

To watchers of debt markets, KKR’s willingness to deploy big bucks in the acquisition of the debt of buy-out deals at meaningful discounts is another hopeful sign that the firestorm in the market for corporate credit is perhaps finally subsiding.

“Because certain of our competitors have withdrawn from the market for corporate debt investments, we will be well-positioned to take advantage of the attractive investment environment for investing in corporate debt,” KKR Financial noted in its offer memo.

“We are finally beginning to see inventory move. The banks are finally starting to sell assets in significant size, not just mark them down,” said one person familiar with KKR’s thinking.

The combination of fewer deals, with Clear Channel being the most recent example, the return of buyers such as KKR and the fact that at least some of the banks are taking the losses and moving on are all hopeful signs.

KKR saw the coming meltdown in the mortgage market earlier than most and abandoned its REIT structure last May but was still not able to rid itself of its mortgage holdings quickly enough.

The announcement contained a hint of another KKR initiative: among the banks handling the $250m share offer is KKR Capital Markets, which is co-lead manager.