FS KKR Capital Corp Launches $300M Buyback to Address Discount
FS KKR Capital Corp, a $12.3B private credit fund managed by KKR, launched a $300M share buyback to counter trading at multi-year price lows. Peer funds at BlackRock and Apollo have also boosted governance and explored asset sales to mitigate steep discounts across the $1.8T business development company sector.
1. Share Buyback Initiative
FS KKR Capital Corp approved a $300 million share buyback after its stock traded at the widest discount to net asset value in years. The board authorized the program following investor lobbying and internal demand analysis to support the fund’s market price.
2. Fund Performance and Discount
The $12.3 billion fund has seen its share price slump as business development company investors seek liquidity, pushing trading levels far below reported NAV. Persistent discount trading has heightened valuation concerns and hampered investor sentiment.
3. Peer Fund Responses
BlackRock’s $1.5 billion TCP Capital fund has expanded its investment committee with seasoned private credit executives to refine loan selection. Apollo is marketing its $3 billion MidCap Financial Investment Corp for sale to address NAV declines and loss pressures.
4. Sector Challenges and Outlook
The $1.8 trillion BDC sector faces chronic discount pressures due to limited daily liquidity and narrow investment mandates. Continued share-price weakness could drive further buybacks, strategic asset sales or structural changes in listed private credit vehicles.