Kohlberg Kravis Roberts is preparing to raise its third European fund towards the end of the year on the back of its rapid pace of investment in 2006.

Sources said they expected the fund to target about €7.7bn ($10bn), compared with the $16.7bn global fund it has just closed. At this size, KKR's fund would dwarf its US peers that are also about to start Europe-only fundraisings or have begun. Carlyle is expected to raise just less than €5bn.