KKR CFO reports pressure on public credit fund shares
KKR CFO Robert Lewin says the firm's public credit fund faces pressure as shares fell 29 percent this year. He sees growth potential in non-traded vehicles.
KKR & Co. Inc. has acknowledged recent performance pressures within its publicly traded private credit operations, even as the global investment firm identifies expanding opportunities in non-traded investment vehicles. Speaking at the RBC Capital Markets Global Financial Institutions conference in New York on Wednesday, Chief Financial Officer Robert Lewin addressed the challenges facing business development companies (BDCs) amid broader market volatility.
The BDC sector has encountered significant headwinds this year, with publicly traded shares declining and redemption requests for non-traded versions increasing. These trends reflect growing investor anxiety regarding credit market stability and specific exposure to the software industry. Within this environment, shares of FS KKR Capital Corp. have experienced a 29% decline since the start of the year.
Robert Lewin clarified the scale of the firm's involvement in these structures, noting that only a portion of their total direct lending assets are held within the BDC framework.
\"The minority of our capital, roughly $17 billion in direct lending, sits in BDC format.\"
Of that total, approximately $14 billion is managed through FSK, which has seen pressure on returns in the near term. The CFO attributed this performance largely to subordinated exposure within the portfolio. Despite these short-term hurdles, the firm remains optimistic about the potential for growth in private investment structures.
\"We dont have much capital in that private BDC space, and we think there can be a real opportunity for us here.\"
