Global investment firms KKR and Capital Group have filed registration statements with the U.S. Securities and Exchange Commission for two public-private fixed income funds – Capital Group KKR Core Plus+ and Capital Group KKR Multi-Sector+ – both of which are expected to launch in the United States in the first half of 2025, pending regulatory approval.
These filings follow the initial announcement of the firms’ partnership to create a new category of hybrid public-private investment solutions that the firms state will provide new ways for investors to incorporate private markets into their portfolios. The two new strategies are expected to be offered through financial professionals to the U.S. wealth market, along with select institutional investors.
“As a firm, we do not enter a new market unless we are committed for the long term and believe we can offer something meaningful and durable for our clients,” said Holly Framsted, head of global product strategy and development at Capital Group. “Our focus remains on delivering distinct solutions that serve unmet needs in investor portfolios. These strategies aim to solve the access gap that individual investors currently face when it comes to private investments, and we expect these two public-private strategies will be the first of many across asset classes and geographies.”
The firms said that, while Capital Group is responsible for the overall strategy, the two organizations intend to work closely together to deliver investment portfolios that thoughtfully combine public and private investments, with an aim toward solving distinct investor needs.
“KKR and Capital Group share a deep commitment to making private markets assets more accessible to individual investors,” said Eric Mogelof, partner and head of global client solutions at KKR. “We are pleased to take this next step in our strategic partnership and look forward to offering additional solutions that bring our best‐in‐class private markets investment capabilities to a broader group of investors.”
According to the two separate filings, the funds are both non-diversified, closed-end management investment companies that will continuously offer common shares and operate as interval funds. The stated objective for both funds is to provide a high level of current income and, for Capital Group KKR Core Plus+, to seek maximum total return, consistent with preservation of capital. Both funds will invest in private corporate direct lending and asset-based finance instruments. They’ll be sold through U.S. financial advisers and structured as interval funds that offer some liquidity to investors on a quarterly basis, according to two separate filings.
The filings also said that the funds will seek to allocate approximately 60% of the funds’ assets to public credit and 40% to private credit assets, though this could fluctuate significantly.
The new public-private solutions platform seeks to deliver Capital Group’s public market capabilities combined with KKR’s extensive private markets expertise. According to the firms, Capital Group currently manages more than $555 billion in public fixed income assets, while KKR currently manages over $100 billion in private credit assets.
Capital Group, home of American Funds, said it has been “singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research, and individual accountability since 1931.” As of Sept. 30, 2024, Capital Group manages more than $2.8 trillion in equity and fixed income assets for millions of individuals and institutional investors around the world.
KKR is a global investment firm that offers alternative asset management, as well as capital markets and insurance solutions. KKR sponsors investment funds that invest in private equity, credit, and real assets and has strategic partners that manage hedge funds.
Click here to visit The DI Wire directory page.
Read the full article here
