KIO (KKR Income Opportunities Fund)

About KKR

KKR Credit Advisors (US) LLC (the “Advisor”) serves as the Fund’s investment advisor. Launched in 2004, the Advisor is a subsidiary of KKR & Co. Inc. (together with the Advisor and its other affiliates, “KKR”), a leading global investment firm with more than a 46-year history of leadership, innovation and investment. The Advisor’s investment teams, which are organized by industry, invest across the capital structure with the goal of protecting capital and achieving attractive risk-adjusted returns.

Fund Objective and Strategy

KKR Income Opportunities Fund (“KIO” or “the Fund”) seeks to allocate across credit instruments to capitalize on changes in relative value among corporate credit investments and manage against macroeconomic risks.

The Fund is designed to offer investors:

Potential for attractive levels of current income through monthly distributions

A targeted portfolio investing primarily in bank loans and high yield securities

A consistent approach and strong credit investment process that seeks to adapt credit strategies to market conditions

Fund Facts

as of September 30, 2023


Portfolio Characteristics

as of September 30, 2023

Credit Quality

B-: 25.2%
CCC+: 18.6%
Not Rated: 14.0%
CCC: 11.2%
B: 9.3%
B+: 7.6%
BB-: 5.4%
CCC-: 5.0%
BBB-: 2.1%
BB+: 0.4%
BBB: 0.4%
BB: 0.4%
C: 0.3%
D: 0.2%

Portfolio Composition

High Yield Security: 51.3%
Leveraged Loan: 41.5%
Collateralized Loan Obligation: 5.9%
Common Stock: 1.2%
Preferred Stock: 0.1%

Top 10 Issuers

NCL Corp Ltd 3.8%
Douglas Holding AG 3.4%
Varsity Brands Inc 2.6%
NEP Broadcasting LLC 2.6%
NGL Energy Partners LP / NGL Energy Finance Corp 2.5%
PSAV Inc 2.4%
SPX FLOW Inc 2.4%
National Financial Partners Corp 2.2%
Solera LLC 2.1%
American Airlines Group Inc 2.0%

Top 5 Industries

Hotels, Restaurants & Leisure 13.2%
Media 7.0%
Building Products 6.8%
Financial Services 5.9%
Machinery 5.5%
TOTAL 38.4%


United States 87.5%
Europe 11.2%
Other 1.3%

Past performance is no guarantee of future results. Both the market price for Fund shares and their NAV will fluctuate with market conditions. Current performance may be higher or lower than the performance shown.

About Risk: An imbalance in supply and demand in the income market may result in valuation uncertainties and greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market. Investments in income securities may be affected by changes in the creditworthiness of the issuer and are subject to the risk of non–payment of principal and interest. The value of income securities also may decline because of real or perceived concerns about the issuer’s ability to make principal and interest payments. Borrowing to increase investments (leverage) will exaggerate the effect of any increase or decrease in the value of Fund investments. Investments rated below investment grade (typically referred to as “junk”) are generally subject to greater price volatility and illiquidity than higher rated investments. As interest rates rise, the value of certain income investments is likely to decline. Senior loans are subject to prepayment risk. Investments in foreign instruments or currencies can involve greater risk and volatility than U.S. investments because of adverse market, economic, political, regulatory, geopolitical or other conditions. Changes in the value of investments entered for hedging purposes may not match those of the position being hedged. The Fund may engage in other investment practices that may involve additional risks.

Common shares of the Fund are only available for purchase and sale at current market price on a stock exchange.

An investment in the Fund is not appropriate for all investors and is not intended to be a complete investment program. An investment in the Fund involves risks, including the risk that you may receive little or no return on your investment or that you may lose part or even all of your investment. Therefore, prospective investors should consider carefully the Fund’s investment objectives, risks, charges and expenses and should consult with a tax, legal or financial advisor before making any investment decision. Shares of closed-end investment companies frequently trade at a discount from their net asset value.

The information on this sheet is for U.S. residents only and does not constitute an offer to sell, or a solicitation of an offer to purchase, securities in any jurisdiction to any person to whom it is not lawful to make such an offer.

Investment Team

Co-Head of Credit & Markets
KIO Portfolio Manager
Investment Committee Member
KIO Portfolio Manager
Investment Committee Member

The Fund invests mainly in leveraged loans, high yield securities, common stocks not actively traded and preferred stocks. These investments may involve certain risks, including, but not limited to, those described below:

Market Discount Risk — The price of the Fund’s common shares of beneficial interest will fluctuate with market conditions and other factors. Shares of closed-end management investment companies frequently trade at a discount from their net asset value, which may increase the risk of loss.

Leverage Risk — Leverage is a speculative technique that may expose the Fund to greater risk and increased costs. When leverage is used, the net asset value and market price of the Fund’s shares and the Fund’s investment return will likely be more volatile.

Market Risk — Bond markets rise and fall daily. As with any investment with performance tied to these markets, the value of an investment in the Fund will fluctuate, which means that shareholders could lose money.

Interest Rate Risk — Interest rates will rise and fall over time. During periods when interest rates are low, the Fund’s yield and total return also may be low. Changes in interest rates also may affect the Fund’s share price and a sharp rise in interest rates could cause the Fund’s share price to fall. The longer the Fund’s duration, the more sensitive to interest rate movements its share price is likely to be.

Credit Risk — The Fund is subject to the risk that a decline in the credit quality of an investment could cause the Fund to lose money or underperform. The Fund could lose money if the issuer or guarantor of an investment fails to make timely principal or interest payments or otherwise honor its obligations. The Fund will be subject to credit risk with respect to the counterparties of derivative contracts (whether a clearing corporation in the case of exchange-traded instruments or another third party in the case of over-the-counter instruments) and other instruments entered into directly by the Fund.

Liquidity Risk — A particular investment may be difficult to purchase or sell. The Fund may be unable to sell illiquid securities at an advantageous time or price.

Prepayment and Extension Risk — The Fund’s investments are subject to the risk that the investments may be paid off earlier or later than expected. Either situation could cause the Fund to hold investments paying lower than market rates of interest, which could hurt the Fund’s yield or share price.

High Yield Risk — High yield securities and unrated securities of similar credit quality (sometimes called junk bonds) that the Fund may invest in are subject to greater levels of credit and liquidity risks. High yield securities are considered primarily speculative with respect to the issuer’s continuing ability to make principal and interest payments.

Foreign Investment Risk — The Fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates (the currencies will decline in value relative to the U.S. dollar or, in the case of hedging positions, the U.S. dollar will decline in value relative to the currency being hedged) or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets.

Issuer Risk — The value of securities may decline for a number of reasons that directly relate to the issuer, such as its financial strength, management performance, financial leverage and reduced demand for the issuer’s goods and services, as well as the historical and prospective earnings of the issuer and the value of its assets.