(Reuters) -Investment giant KKR said on Wednesday it had raised $6.5 billion to provide asset-backed financing, as companies and investors seek out credit alternatives beyond traditional loans.

Asset-backed financing refers to loans backed by assets such as mortgages or royalties that have predictable cash flows. Such loans do not rely solely on a borrower's creditworthiness.

KKR said it had hauled in $5.6 billion for a fund, named KKR Asset-Based Finance Partners II, and about $1 billion from separate accounts focused on the same type of investments.

These funds give borrowers access to loans they might not get from banks, as traditional lenders have been pulling back from riskier loans due to strict regulations. The funds also offer firms such as KKR exposure to investments with consistent returns.

"The $6 trillion ABF market, expected to top $9 trillion by 2029, remains undercapitalized despite its rapid growth," KKR's Global Head of Private Credit, Daniel Pietrzak, said.

The latest fund attracted commitments from a wide base of investors, including pensions, sovereign wealth funds, insurers, asset managers and family offices, the company said.

KKR launched its ABF in 2016. It manages more than $74 billion in ABF assets under management.

(Reporting by Prakhar Srivastava in Bengaluru; Editing by Devika Syamnath)