KKR FS Income Trust (K-FIT), the non-traded BDC with $1.54bn of NAV, will prorate first-quarter redemptions after investors sought to withdraw 6.3% of outstanding shares in the fund’s March repurchase. Investors will receive about 80% of what they asked to redeem as KKR’s tender offer was set at 5%.
The pressure wasn’t uniform across KKR’s retail credit platform.
KKR FS Income Trust Select (K-FITS) which had NAV of $943.7m, received repurchase requests equal to 3.7% of outstanding shares and will meet them in full, according to shareholder letter.
Bloomberg reported that both funds still took in gross inflows above total repurchase requests during the quarter. That suggests the gating was triggered by the funds’ built-in liquidity limits rather than by net outflows at the complex level.
KIT profile - counterpart fund for non-US investors of K-FIT
KKR Income Trust I (KIT)
KIT invests primarily in privately originated and directly negotiated senior secured corporate loans and asset-based financings across the US, Europe and, to a lesser extent, developed Asia-Pacific. The portfolio targets upper middle‑market borrowers and diversified pools of financial and hard assets, with a bias to floating‑rate, first‑lien exposures, complemented by opportunistic allocations to syndicated loans, high‑yield bonds and other liquid or structured credit to enhance liquidity, diversification and income.
Sector pressure is spreading across semi-liquid credit
KKR is the latest manager testing the liquidity terms embedded in non-traded BDCs and other semi-liquid private credit vehicles. Reuters reported that BlackRock, Ares and Morgan Stanley have kept quarterly withdrawals around standard 5% limits to avoid forced sales of illiquid assets, while Blackstone and Oaktree have at times gone beyond usual limits to meet demand.
For wealth platforms and advisers, the immediate implication is operational. Unfilled K-FIT requests won’t automatically roll forward, so investors who still want liquidity will need to submit again in the next tender period, and quarterly access remains constrained by the 5% repurchase cap even when subscriptions continue to come in.
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