Capital Group and KKR have received regulatory clearance from the US Securities and Exchange Commission to launch two co-branded credit funds, marking a key step in the firms’ joint push to bring private credit to the retail investor market.

The two new products – Capital Group KKR Core Plus+ and Capital Group KKR Multi-Sector+ – represent the first offerings from the strategic partnership between one of the largest US mutual fund houses and one of the world’s leading alternative investment managers. The initiative reflects a growing industry trend of private equity firms expanding into the high-net-worth and retail channels.

Structured as 1940 Act interval funds, the vehicles will blend 60% public fixed income with 40% private credit exposure, including direct lending and asset-backed strategies. The funds will offer quarterly liquidity up to 10% of net asset value, daily pricing, and minimum investments of just $1,000—lowering barriers to entry for retail and financial adviser clientele.

The Core Plus+ fund will carry a management fee of 84 basis points, while the Multi-Sector+ fund is set at 89 basis points. Neither fund will employ leverage or charge performance fees.

KKR and Capital Group are jointly seeding and managing the funds, which are designed to meet growing demand for hybrid credit strategies that offer higher yield and diversification beyond traditional bonds. The firms plan to expand the product suite over time to include offerings across private equity, real estate, and infrastructure.

The move follows a broader wave of strategic partnerships aimed at retail distribution, including Blackstone’s alliances with Vanguard and Wellington, Apollo’s tie-up with State Street, and BlackRock’s collaboration with Partners Group.

With institutional capital flows showing signs of strain, the retail channel is fast emerging as private equity’s next growth frontier—and these newly approved credit funds mark a major step toward unlocking that opportunity.

Source: Bloomberg