KKR & Co Inc expects that trading in private credit assets is likely to develop over time, as the industry explores ways to improve liquidity and broaden investor access, according to a report by Bloomberg citing comments by co-chief executive officer Scott Nuttall.
Speaking at the Bernstein Annual Strategic Decisions Conference, Nuttall said that while the evolution of a secondary market for private credit could help attract additional capital and improve transparency, firms will need to balance liquidity with preserving the illiquidity premium that underpins returns in private markets.
He noted that any transition toward tradability would likely occur gradually and could initially apply to certain segments of the market, such as direct lending portfolios, where standardisation and scale may make secondary trading more feasible.
The comments reflect growing industry experimentation around how to increase flexibility in private credit markets, as managers seek to expand the investor base without undermining core return structures.
Nuttall also pointed to shifting deal dynamics in the sector, with lenders increasingly structuring transactions on more conservative terms, including tighter leverage levels and higher fees, amid a more cautious credit environment.
KKR continues to expand its exposure to asset-based finance, which includes lending secured against cash-generating assets such as credit card receivables, mortgages and other consumer and corporate assets. The firm currently manages around $92 billion in such strategies.
Overall, KKR & Co Inc reported approximately $758bn in assets under management at the end of the first quarter, including $329bn in credit assets, underscoring the scale of its growing private credit platform.
