Capital Group and KKR & Co. received approval from the U.S. Securities and Exchange Commission to begin selling two credit funds: Capital Group KKR Core Plus+ and Capital Group KKR Multi-Sector+.
At the time of registration last fall, the global investment firms announced their goal to create hybrid public-private investment solutions of which individual investors can incorporate into their portfolios and thereby gain exposure to private markets. These hybrid funds are the first income products that the firms have developed together. They will be offered through financial professionals to the U.S. wealth market, along with select institutional investors.
Although subject to fluctuation, both Core Plus+ and Multi-Sector+ will have asset targets of 60% publicly traded debt and 40% private credit, including direct loans and asset-backed credit.
According to the two filings, the funds are both non-diversified, closed-end management investment companies that will continuously offer common shares and operate as interval funds, offering some liquidity to investors on a quarterly basis.
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.
Investors need a minimum of $1,000 to invest in the funds. Regulatory filings show annual fees start as low as 0.84% for the Core Plus+ product and are 0.89% for the Multi-Sector+ fund. Additionally, neither fund will use leverage or charge performance fees.
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 manages $638 billion in alternative assets and sponsors investment funds that invest in private equity, credit, and real assets.
These funds are the latest example of financial industry players identifying ways to develop public-private investment products. Earlier this month, Blackstone (NYSE: BX), Wellington Management, and Vanguard announced a strategic alliance to help everyday investors access simplified multi-asset investment opportunities that integrate public and private markets, as well as active and index strategies.
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