KKR’s non-traded business development company KKR FS Income Trust, commonly referred to as K-FIT, has limited the amount of shareholder redemptions it will satisfy after a recent uptick in repurchase requests, according to a shareholder communication dated Tuesday.
The letter says K-FIT received repurchase requests amounting to roughly 6.3% of outstanding shares during the first quarter of 2026. The fund plans to honor about 80% of those requests rather than repurchasing the full amount sought by shareholders.
By contrast, KKR FS Income Trust Select, known as K-FITS, repurchased the entirety of the redemption requests it received, representing about 3.7% of its outstanding shares in the same period.
The communication also notes that inflows from new subscriptions outpaced investor redemption requests over the quarter, helping to offset some of the liquidity pressure triggered by redemptions.
Performance and portfolio composition for K-FITS were disclosed in the letter as well. K-FITS reported an annualized net return of 9.82% as of February 28. The portfolio mix for that vehicle was reported as roughly 71% allocated to U.S. direct lending, 25% to asset-based finance, with the remainder invested in traded credit instruments.
The moves by KKR come amid a broader wave of redemption requests across the private credit industry. The letter referenced investor concerns about valuations, liquidity and borrower health in the sector, which is estimated in the communication at about $2 trillion.
Industry practice cited in the letter indicates that large managers commonly impose quarterly withdrawal caps of about 5% of fund assets to avoid forced sales of illiquid holdings. The letter cites examples of firms that have adhered to such limits, including BlackRock, Ares and Morgan Stanley. It also notes that other managers, such as Blackstone and Oaktree, have at times exceeded standard limits to meet redemption demands.
Finally, the shareholder communication outlined the differing approaches taken by K-FIT and K-FITS in responding to heightened redemptions, and emphasized that subscription inflows during the quarter exceeded the redemption activity reported.