KKR’s Withdrawal Restrictions in Private Credit
KKR has imposed limits on investor withdrawals from its private credit fund, KKR FS Income Trust (K-FIT), following a surge in redemption requests during the first quarter of 2026, according to a report by Reuters cited in Private Equity Wire. The fund received repurchase requests equivalent to approximately 6.3% of outstanding shares and intends to meet around 80% of those requests, aligning with typical liquidity management practices in the sector.
Details on KKR FS Income Trust
For K-FIT, the decision to limit redemptions reflects the volume of requests, which exceeded industry norms, as the firm noted in a letter to shareholders. In comparison, a related vehicle, KKR FS Income Trust Select (K-FITS), fully satisfied redemption requests totaling roughly 3.7% of shares during the same period. K-FITS also saw new investor inflows exceed withdrawal requests, and it has reported an annualized net return of just under 10% as of late February, with the majority of its portfolio allocated to US direct lending and exposures to asset-based finance and a smaller portion in traded credit.
Industry Context and Practices
This move by KKR occurs amid rising redemption pressure across private credit funds, where investors are growing more cautious about valuations, liquidity constraints, and the financial health of borrowers in the roughly $2 trillion market, as detailed in the Private Equity Wire report. Industry practice typically limits quarterly withdrawals to around 5% of fund assets to avoid forced sales of illiquid holdings, with large asset managers such as BlackRock, Ares Management, and Morgan Stanley generally adhering to these thresholds. In some instances, firms like Blackstone and Oaktree Capital Management have chosen to exceed standard limits to accommodate investor demands, according to the same source.
