Image Souce: shutterstock

Highlights

  • KKR Credit Income Fund (ASX:KKC) provides access to global credit opportunities, enhancing income generation for investors.
  • KKC delivered a 1.78% return in September.
  • As of 30 September 2024, the fund has delivered a total return of 10.43% over the past year.
  • KKR has declared an ordinary fully paid dividend of AUD 0.0167 for October.

Private credit funds, like private equity funds, raise capital from investors, but instead of acquiring equity, they focus on providing loans. While most private credit funds operate without leverage, a smaller segment may utilise borrowing or derivatives to boost their returns.

The KKR Credit Income Fund (ASX: KKC) offers Australian and New Zealand investors a unique opportunity to achieve attractive, risk-adjusted returns through a diversified portfolio of alternative credit investments. Leveraging proprietary channels from Kohlberg Kravis Roberts & Co. L.P. (KKR), the fund provides access to global credit opportunities that can enhance income generation for its investors. This makes it particularly suitable for those looking to incorporate alternative investments into their portfolios.

Designed for investors with a medium to high risk/return profile and a minimum investment horizon of five years, the fund serves as a strategic satellite allocation. Founded in 1976, KKR brings extensive investment experience and a commitment to ESG principles, ensuring a responsible approach to growth and sustainability.

The fund was listed on the ASX on 21 November 2019.

KKC Portfolio update

  • KKC delivered a 1.78% return in September 2024
  • The weighted average price of the underlying KKC assets in the portfolio stood at 98.1% of par as at month end.
  • The Yield to Maturity, which is inversely related to prices, stood at 9.0% and the current yield of the underlying assets was 9.2%.

Data Source: KKC monthly report

Monthly Distribution Target Maintained at AU$ 0.0167

On 24 October 2024, the fund announced an ordinary fully paid dividend of AUD 0.0167 for October, scheduled for payment on 14 November 2024. This aligns with the FY25 distribution estimate of AU$0.20. For the year ending 30 June 2025, the distribution guidance is expected to maintain the monthly target at AU$0.0167 per unit, totalling AU$0.20 annually.

KKC Technical Summary and Chart

Source: Analysis by Kalkine Group

KKR's Fund is currently exhibiting a strong bullish trend, trading above both a key horizontal trendline and a rising trendline. After recently reaching a peak, the fund has entered a consolidation phase, characterized by increasing trading volumes that support its upward momentum. The 14-day Relative Strength Index (RSI) is at 52.72, indicating stability at support and remaining within bullish territory. Furthermore, the market price is positioned above the 50-period Simple Moving Average (SMA), suggesting that these levels are likely to serve as significant support zones. Key resistance levels are projected at AUD 2.61 and AUD 2.85, while solid support is identified at AUD 2.08 and AUD 1.90. Overall, the technical indicators point to continued positive sentiment surrounding the fund.

As of 30 October 2024, the fund’s closing price is AU$ 2.340, with a market capitalisation exceeding AU$ 761mn.