KKR & Co’s (NYSE:KKR) private credit fund for wealthy clients outside the U.S. has seen redemption requests ease, even as redemption pressure continues across the North American private credit market.
KKR-Income Trust I, a non-traded private credit fund which serves investors in Europe, the Middle East, Africa, and the Asia-Pacific region, received withdrawal requests equal to approximately 2.5% of its net asset value in Q3, according to a document seen by Bloomberg.
In Q2, the fund capped redemptions at 5% after experiencing $10.5 million in outstanding withdrawal requests. The fund expects to honor those requests as well as additional second-quarter requests, for a combined total of $34.7 million, the document noted.
KKR-Income Trust I saw an increase of 1.9% in the second quarter and an aggregate average net asset value of approximately $1.4 billion at the end of that period, Bloomberg noted. The fund also saw an annualized net total return of 10.3% since its inception.
In the second quarter, investors sought to withdraw more than $14.5 billion from over a dozen private credit funds, but only $8.6 billion was ultimately returned, leaving billions of dollars of capital locked up, Bloomberg reported in July.
Private credit funds have been capping redemptions at 5% in recent months amid rising concerns about asset quality and valuations, particularly in software lending.
The flagship private credit fund of Cliffwater LLC capped redemptions at 5% in Q3 after investors asked to redeem approximately 16% of shares. Cliffwater Corporate Lending Fund told shareholders in a letter that it would fulfill approximately one-third of redemption requests.
Meanwhile, Blackstone’s private credit vehicle also saw elevated redemption requests this month, capping the withdrawal limit at 5% after investors sought to tender roughly 10% of shares during the third quarter for the $77.2 billion Blackstone Private Credit Fund (BCRED).
BCRED received $4.3 billion of repurchase requests in the third quarter, and some of that demand reflected investors who had already tried to redeem in the second quarter. In the prior quarter, the fund satisfied about half of the $4.5 billion in requests, leaving $2.3 billion outstanding, of which some was resubmitted in the latest tender.
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