KKR and Capital Group Launch Two Credit-Focused Interval Funds

On April 29, 2025, KKR and Capital Group took a significant step in democratizing access to private markets by launching two credit-focused interval funds: the Capital Group KKR Core Plus+ and Multi-Sector+. These funds aim to bridge the gap between public and private investments, offering individual investors a way to diversify their portfolios with exposure to private credit—previously accessible only to institutional and high-net-worth investors. By blending public fixed income with private debt investments, the partnership seeks to redefine how retail investors approach risk and liquidity in their portfolios.

Structural Innovation and Accessibility

The funds’ 60/40 asset allocation—60% public fixed income (e.g., corporate bonds) and 40% private credit (e.g., senior loans, mezzanine debt)—is a hallmark of their design. This dynamic structure allows managers to adjust allocations based on market conditions, balancing the stability of public markets with the yield potential of private assets.

Liquidity is a critical feature for individual investors. Unlike traditional interval funds that typically offer 5% quarterly repurchase options, these funds allow up to 10% of outstanding shares to be redeemed at net asset value (NAV) quarterly. While this increases accessibility, investors face proration risk if demand exceeds the cap.

Cost efficiency is another highlight. The Core Plus+ carries a TER of 0.84%, while the Multi-Sector+ charges 0.89%—both of which include fee waivers until April 2026. These rates are competitive compared to similar products, though investors should monitor potential increases post-waiver expiration.

The $1,000 minimum investment further lowers the barrier to entry, targeting retail investors who previously lacked access to private markets.

Future Ambitions and Market Expansion

The partnership’s ambitions extend beyond credit. By 2026, the firms plan to launch two equity-focused interval funds, expanding their public-private blend strategy to equities. Additionally, they aim to develop model portfolios and target date funds integrating private assets, particularly for retirement planning. Global expansion is also on the horizon, though details remain under review.

A key focus is empowering financial advisors. A modular digital platform will provide educational tools, including articles, videos, and interactive data dashboards, to help advisors navigate private markets. Access to Capital Group’s portfolio construction desk will further aid in tailoring solutions for clients.

Risks and Considerations

While the funds offer innovation, they are not without risks. The illiquidity risk is inherent in interval fund structures: shares are not exchange-traded, and secondary markets may not develop. Proration during redemption windows could delay access to capital.

Private credit investments carry heightened credit risk and valuation uncertainty. Structured products and derivatives used in the funds may amplify volatility, while non-diversification (concentration in fewer issuers) could expose investors to sector-specific downturns.

Tax implications are another concern. Distributions exceeding taxable earnings may result in return of capital, increasing tax liabilities. Investors should consult tax professionals before committing capital.

Conclusion: A New Frontier for Retail Investors

KKR and Capital Group’s venture represents a bold move to democratize private market access. With $2.8 trillion in combined AUM (Capital Group) and $600 billion (KKR), the partnership brings scale and expertise to a segment historically dominated by institutional investors.

The funds’ low cost, flexible liquidity terms, and $1,000 minimum cater to individual investors seeking diversification without prohibitive barriers. However, the risks—particularly illiquidity and credit exposure—demand careful consideration.

Looking ahead, the 2026 equity-focused launches and global expansion plans could further cement this as a transformative era for retail investing. For now, the success hinges on educating advisors and investors about the blend of public and private markets, a task the firms are addressing through their digital platform and targeted outreach.

In a market where 95% of U.S. individual investors lack private market exposure, these funds could mark the start of a paradigm shift—one that balances risk, yield, and accessibility in an increasingly complex financial landscape.