Subsequent strategies will include two public-private equity-oriented solutions, expected to launch in the U.S. in 2026
Leading global investment firms Capital Group and KKR launched two interval funds focused on credit strategies, Capital Group KKR Core Plus+ and Capital Group KKR Multi-Sector+. Since their strategic partnership was announced in May 2024, the organizations have been working together on opportunities to further broaden access to private market investment solutions and provide education for individual investors, financial advisors and institutional clients.
Financial Technology Insights: Beeline & Rabbu Partner to Simplify Short-Term Rental Deal
Capital Group and KKR are already working on additional strategies and expect to deliver two equity-focused strategies intended to address different client needs and offer access to additional private markets asset classes.
“These solutions demonstrate the power of our combined scale and experience. We believe what Capital Group and KKR can do together is unmatched blending best-in-class public and private market exposures to deliver diversified and differentiated investment outcomes at a compelling fee. I think of these public-private solutions as the best of both worlds,” said Capital Group President and CEO, Mike Gitlin.
Financial Technology Insights: Wirex Launches Business Banking for Web3 & Crypto Firms
The two new interval funds employ a thoughtful and deliberate approach, designed from the ground up to deliver blended public-private markets exposure with a risk, return and liquidity profile driven by input from financial advisors and a focus on investor needs and outcomes. Defining features include:
- Public credit and private credit exposures combined into a single, holistic solution: over time, and subject to market conditions, each fund will seek to allocate approximately 60% of net assets to public fixed income and 40% to private credit consisting of direct lending and asset-based finance investments.
- Improved liquidity relative to standalone alternatives: quarterly repurchase offers up to 10% of the fund’s outstanding shares at net asset value (NAV). Most interval funds offer 5% quarterly liquidity1.
- Highly competitive total expense ratios2:
- Capital Group KKR Core Plus+ at 84 basis points
- Capital Group KKR Multi-Sector+ at 89 basis points
- Low investment minimum of $1,000 for all share classes.
Just getting started
“Together with Capital Group, we are aiming to unlock the benefits of private investments for the 95%3 of individual investors who have not historically been able to invest in the private markets. We have only scratched the surface of what we can offer investors as we look to expand our collaboration across additional asset classes, geographies and formats. We entered this partnership knowing that our firms are highly aligned with collaborative cultures and complementary strengths―the launch of these first two funds shows what’s possible when our teams come together,” said Joe Bae and Scott Nuttall, Co-CEOs of KKR.
Financial Technology Insights: Nucleus Synapse 2025 Fuels AI-Driven Banking in MENA
“Expanding access to private markets is much more than two public-private credit solutions. A joint, cross-company project team is already working on public-private equity solutions. We’re discussing how we can bring public-private model portfolio solutions to our clients,” said Gitlin. “We believe there is a role for private market solutions in retirement, including target date strategies. We’re working on the best way to bring public-private solutions to clients outside the U.S. And we’re also seeing how Capital Group can work more closely with KKR to support their insurance business. Needless to say, there’s a lot going on as we partner to build this category and best serve our clients,” Gitlin added.
Investing in education
Bringing public-private solutions to a broader audience is a critical first step in expanding access to private markets, and Capital Group and KKR are intent on ensuring the solutions can be successfully integrated into client portfolios and form part of turnkey solutions.
“Our partnership extends beyond products to the power of financial advice. Capital maintains relationships with more than 200,000 financial advisors across the United States. We have an opportunity as a trusted partner to help advisors deliver this significant advancement in our industry to their clients. We’ve built a knowledge platform to aide with understanding the category and are providing the tools needed to build client-centric portfolios using these strategies,” said Matt O’Connor, CEO of Capital Group’s Client Group.
The firms have built a robust educational platform to help financial advisors understand how to utilize private markets in client portfolios, which includes:
- A modular, digital experience calibrated for financial advisors with varying levels of familiarity and experience with private markets.
- A variety of formats including articles, videos and data interactives so advisors can learn in a way that suits their needs.
- Actionable insights from portfolio managers, investment specialists and portfolio strategists across Capital Group and KKR.
- Access to Capital Group’s portfolio construction desk for support with asset allocation and portfolio construction.
“The opportunity set for public-private solutions is untapped both globally and across asset classes,” said Eric Mogelof, KKR’s Global Head of Client Solutions. “Together, we are building a new public-private category for investors and the educational resources to equip advisors and individuals to learn more about private markets and the potential benefits of incorporating private assets into diversified portfolios. We are laser focused on serving the needs of investors, and we could not be more thrilled to take this next step in our partnership with Capital Group.”
Capital Group manages more than $2.8 trillion in assets, while KKR manages more than $600 billion across private equity, real assets, insurance and credit.
1Source: Morningstar’s Guide to Interval Funds; Exhibit 8 Redemption Frequencies and Percentages; Fund company filings data as of May 31, 2024.
2Total expense ratios indicated for the F3 share class of Capital Group KKR Core Plus+ and Capital Group KKR Multi-Sector+. Expense ratios are as of the fund’s prospectus available at the time of publication and are estimated. The investment adviser is currently waiving/reimbursing a portion of other expenses. Net expense ratios reflect the waiver/reimbursement, without which they would have been higher. The waiver/reimbursement will be in effect through at least April 22, 2026. Please see the fund’s most recent prospectus for details.
3Source: Capgemini Research Institute for Financial Services Analysis, 2024 and KKR analysis.
To share your insights with the FinTech Newsroom, please write to us at sudipto@intentamplify.com
Source – PR Newswire
