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KKR Commits $300 Million to Support FS KKR Capital Fund
KKR & Co. is investing $300 million of its own capital into FS KKR Capital, a business development company it co-manages with Future Standard. The move comes as the fund faces rising loan defaults that contributed to a $560 million loss in the first quarter. The investment includes a tender offer for shares and new preferred stock, alongside a share repurchase program and waived incentive fees.
May 11, 6:30 AM·1m read1 source
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KKR & Co. is committing $300 million of its own capital to FS KKR Capital, the business development company it co-manages with Future Standard. The investment is intended to support the fund as it deals with pressure from rising loan defaults that contributed to a $560 million loss in the first quarter.
KKR Alternative Assets will buy up to $150 million of FS KKR Capital shares at $11 each through a tender offer. The firm will also invest $150 million in newly issued preferred stock. The board of directors of FS KKR Capital approved a $300 million share repurchase program.
The program is expected to run for approximately one year and will expire on June 1, 2027. It can be extended or end sooner depending on when the authorized amount is reached. KKR agreed to waive its incentive fees for four quarters as part of the support measures.
At the end of Monday's market close, KKR's stock price was down 3.2 percent. The firm will invest $300 million in an effort to bolster the fund as loan defaults climb.
