KKR & Co. (NYSE:KKR) and Capital Group have launched a new public-private fund called Capital Group KKR Global Multi-Sector+ (GMS+), which will provide high-net-worth European and Asian investors with access to private credit assets.
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Sixty percent of assets will be invested in public credit assets managed by Capital Group and 40% will be invested across private credit assets managed by KKR, Bloomberg reported.
The fund will offer repurchase requests of up to 3% of the fund on a monthly basis and will initially be available through HSBC Private Bank in select markets. The fund is managed by Capital Group with KKR serving as the sub-adviser.
Last month, it was announced that KKR and Capital Group were working on the launch of a public-private credit fund, which will be launched in Asia this year.
The fund will target both public and private investments as a ‘’more liquid, cheaper, and more transparent” option, Capital Group chief executive officer Mike Gitlin told Bloomberg.
This is not the first time Capital Group and KKR have joined together to launch a combination fund. Last year, the companies raised more than $500 million, which was a mix of 60% public credit assets directed by Capital Group and 40% private credit directed by KKR.
The private credit sector has faced significant turbulence in recent months as investors grapple with concerns that artificial intelligence could disrupt large parts of the software industry, alongside growing worries about credit quality and a surge in redemption requests.
With more companies delaying public listings, many investors believe wealthy individuals should devote a larger share of their portfolios to private markets, betting that privately held assets can generate superior long-term performance.
Earlier this year, Apollo Global Management (NYSE:APO) and Schroders formed a similar partnership to co-create a hybrid investment vehicle.
"This partnership is highly complementary, delivering the best of Schroders and Apollo to deliver better outcomes for our clients. It has the potential to offer clients something truly different; innovative investment solutions with the potential to deliver robust, resilient returns, encompassing offerings across the wealth and retirement landscape in the U.K. and the U.S.,” the company wrote in a press release.
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