Kkr Fund: A Guide To Investing In Their Success

KKR is a global investment firm with a diverse range of offerings, including private equity, credit, and real assets such as infrastructure and real estate. With a history dating back to 1976, KKR has established itself as a leader in private equity investing and manages a range of buyout, core, and impact investment strategies. The firm has a strong presence in Australia and New Zealand, with a focus on helping local businesses unlock their potential and achieve success.

KKR offers various funds for investors to consider, including the KKR Private Equity (K-PRIME) Fund, which provides access to the firm's buyout, growth, and core private equity strategies. The KKR Credit Income Fund (ASX: KKC) is another option, aiming to provide attractive, risk-adjusted returns and a diversified portfolio of alternative credit investments to Australian and New Zealand investors.

In this discussion, we will explore the different ways investors can gain exposure to KKR's funds, including direct wholesale investments and platform access for indirect wholesale/retail investors. We will also highlight the key considerations and important information sources that investors should review before making any investment decisions.

KKR Private Equity (K-PRIME) Fund

KKR is an investment firm with offices in 17 countries and 24 cities worldwide. The company has been operating for five decades and has a strong track record of transformative change and accelerated growth. KKR offers various investment opportunities, including private equity, private infrastructure, and private credit.

One of their offerings is the KKR Private Equity (K-PRIME) Fund, which provides a single point of entry to KKR's buyout, growth, and core private equity strategies. The fund aims to provide investors with opportunities for capital appreciation by investing in companies across different sectors and regions.

• Diversified Portfolio: The fund offers exposure to a diversified range of private equity opportunities, including buyout, growth, middle market, global impact, and core private equity.
• Industry Leader Access: K-PRIME provides access to one of the world's leading global private equity firms, KKR, with over 46 years of investing experience.
• Direct Investment: Investors have the ability to invest in every KKR private equity deal alongside KKR funds, allowing for full alignment with the companies and clients.
• Open-Ended Structure: K-PRIME is an open-ended fund, providing continuous investment opportunities without capital calls and offering quarterly liquidity (subject to gates).
• Lower Investment Minimums: The fund offers lower investment minimums compared to traditional private equity funds, making it more accessible to a wider range of investors.
• Actively Managed Exposure: The fund aims to provide actively managed AUD hedged exposure to a diversified portfolio of private equity investments, allowing investors to manage currency risks effectively.
• Medium to Long-Term Capital Appreciation: The fund seeks to obtain medium to long-term capital appreciation by investing in global private equity investments.

To invest in the KKR Private Equity (K-PRIME) Fund, investors should carefully review the fund's prospectus, which is available on the KKR website. It is also recommended to seek independent financial advice and consider the fund's risks and fees before making any investment decisions.

KKR Credit Income Fund

The KKR Credit Income Fund (ASX: KKC) is a newly constituted managed investment scheme that provides investors in Australia and New Zealand with access to global credit investment opportunities. The fund's assets are directly or indirectly invested in the KKR Managed Funds, which are managed by KKR's credit investment teams.

The KKR Credit Income Fund aims to provide Australian and New Zealand investors with attractive, risk-adjusted returns and access to a diversified portfolio of income-generating alternative credit investments. The fund has a monthly distribution of 1.67 cents per unit, and its share price is currently $2.31, with a share price movement of 0% compared to its closing share price seven days ago.

KKR has a strong presence in the region, with a local office in Australia and New Zealand ("ANZ") since 2007. The company is committed to helping ANZ businesses achieve their full potential by building long-term partnerships grounded in trust and transparency. KKR leverages its worldwide network of resources and capabilities, along with its track record of transformative change and accelerated growth, to deliver shared success for institutions, partners, and individuals.

KKR offers a range of investment opportunities, including private equity, private infrastructure, and private credit. The KKR Credit Income Fund is one of the company's private credit offerings, providing investors with access to a diversified portfolio of alternative credit investments.

KKR Global Credit Opportunities Fund

The KKR Global Credit Opportunities Fund (AUD) ("GCOF (AUD)") provides investors with exposure to KKR Credit's flagship opportunistic credit strategy in an Australian unit trust hedged to AUD. The fund seeks to provide investors with differentiated access to income-generating credit investment ideas via KKR's global credit platform.

KKR's global presence in both public and private credit markets affords them a unique perspective on relative value and a distinct sourcing edge. Their team and resources enable them to act swiftly in different market environments, identify emerging opportunities, and deliver tailored solutions to clients and companies.

The KKR Global Credit Opportunities Fund seeks attractive risk-adjusted returns and high current income. It aims to deliver a higher yield than traditional bond strategies. The fund structure allows access to private credit, which can be a source of yield.

The fund is a diversified credit solution that can complement a traditional fixed-income portfolio. KKR's investment strategy focuses on the durability of cash flows and principal preservation. They invest across various credit instruments, including senior debt, junior debt, asset-based finance, leveraged loans, high-yield bonds, and structured credit.

KKR has a strong track record and extensive experience in credit investing, with approximately $553 billion in total credit assets under management as of June 30, 2024.

KKR Private Infrastructure (KIF) Fund

The KKR Private Infrastructure (KIF) Fund is an open-ended fund designed for eligible individual investors, providing direct exposure to KKR's well-established infrastructure platform. The fund offers a single entry point to KKR's full suite of infrastructure investment strategies, with a focus on infrastructure businesses and assets.

Benefits of Investing in KIF

• Downside Protection: Investing in essential services with strong market positions may create resiliency against economic shocks.
• Cash Distribution: Long-term contracts or regulated revenues may provide consistent income.
• Inflation Protection: Infrastructure can act as a natural hedge against inflation through pricing power and contracted adjustments.
• Low Correlation to Traditional Asset Classes: Infrastructure investments may have a low correlation to traditional asset classes, providing diversification and complementing other real assets.
• Thematic Investment Opportunities: Investing in infrastructure trends such as digitization, decarbonization, and deconsolidation may benefit from sustainable, long-term industry tailwinds.

KIF Management Team

The KIF Management Team includes experienced professionals such as Raj Agrawal, Global Head of KKR Infrastructure, with 25 years of experience, and Tara Courtney Davies, Co-Head of KKR EMEA and Co-Head of European Infrastructure. The team has expertise in various sectors, including telecommunications, energy transition, utilities, transportation, and more.

Risks and Disclosures

It is important to note that investments in infrastructure strategies come with risks. There is no guarantee that the fund's investment program will be successful, and investors may not realize a return of invested capital. The fund's targeted returns may not be achieved, and there is a risk of losing all or part of the investment.

Investor Suitability

The KKR Private Infrastructure (KIF) Fund is suitable for eligible individual investors seeking direct exposure to infrastructure investments. The fund provides access to a diversified range of infrastructure opportunities, including critical infrastructure assets across various sectors and geographies.

KKR Global Private Credit Fund

KKR is a leading global investment firm with a strong presence in both public and private credit markets. The KKR Global Private Credit Fund (KIT AUD) is a globally diversified open-ended private credit strategy. It offers immediate exposure to a portfolio of direct lending and asset-based finance with a focus on income generation and long-term capital appreciation.

The fund is managed by Channel Investment Management Limited (CIML), the Responsible Entity for the KKR Global Private Credit Fund. CIML is a subsidiary of Channel Capital Pty Ltd, which has been appointed as Kohlberg Kravis Roberts & Co's (KKR) distribution partner.

To invest in the KKR Global Private Credit Fund, investors should refer to the fund's Product Disclosure Statement and Target Market Determination, which are available on the Channel Capital website. It is important to note that the fund is intended only for wholesale clients as defined under the Corporations Act 2001 (Cth).

KKR's approach to private credit investing is underpinned by its extensive resources and expertise across operational, capital markets, industry advisors, geopolitical, macro, and sustainability domains. KKR also leverages its global platform and local expertise to drive strong outcomes for its stakeholders.

In terms of investment strategy, KKR focuses on fundamental underwriting, emphasising the durability of cash flows and principal preservation. KKR's investment professionals work collaboratively across markets to identify emerging opportunities and deliver bespoke solutions.

Overall, the KKR Global Private Credit Fund offers investors access to a diversified portfolio of private credit investments, aiming to generate income and long-term capital appreciation.

Frequently asked questions