Private credit fund managed by KKR reports jump in troubled loans
u/Possible-Shoulder940 ·
Reddit — r/ValueInvesting
· February 27, 2026 at 02:26
· ⬆ 17 pts
· 💬 2 comments
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Summary
The post shares an FT article detailing a significant drop in the stock of FS KKR Capital Corporation (FSK) due to a reported increase in troubled loans, a dividend cut, and asset markdowns.
The author implies this is a symptom of broader stress in private credit markets, particularly affecting private equity-backed companies and the listed managers of these funds (like KKR, Blackstone, etc.), driven by higher interest rates and economic headwinds.
Quality assessment: This is a news report, not original due diligence (DD). It serves as a data point for further analysis rather than a complete investment thesis.
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[https://www.ft.com/content/06213ba6-5634-4c1c-b949-07013824c79f](https://www.ft.com/content/06213ba6-5634-4c1c-b949-07013824c79f)
A large credit fund managed by KKR tumbled on Thursday after reporting a jump in troubled loans and lower investment income, highlighting the mounting strains in private markets. FS KKR Capital Corporation, a publicly traded vehicle holding private loans, dropped 15 per cent after saying that it would slash its dividend and the valuation of the assets within its portfolio. The markdowns of the FSK fund come amid fears of rising defaults across private equity portfolios and particularly software companies vulnerable to new AI technologies. Worries about rising credit losses and investor redemptions from private credit funds have pummelled the stocks of listed private capital groups such as Blue Owl, KKR, Blackstone and Ares Management this year. KKR’s FSK fund oversees a $13bn portfolio, mostly of loans made to private-equity-backed midsized companies during a record wave of takeover activity over the past decade. Deal activity hit a peak in 2021 and 2022 at the end of an era of historically low interest rates that quickly reversed the following year, causing an industry-wide crunch.