KKR Credit Income Fund · ASX:KKC
KKR Credit Income Fund — Investor Presentation (April 2021)
15 slides from KKR Credit Income Fund's investor presentation, Apr 20, 2021
Slide 1: ASX cover letter: Investor presentation as of 20 April 2021
The Trust Company (RE Services) Limited ABN 45 003 278 831, AFSL 235150 For personal use only 20 April 2021 The Manager ASX Market Announcements ASX Limited 20 Bridge Street Sydney NSW 2000 INVESTOR PRESENTATION AS OF 20 APRIL 2021 We are pleased to provide a copy of the Investor presentation for th
Slide 2: KKR Credit Income Fund Market Update April 2021
For personal use only KKR Credit Income Fund Market Update April 2021
Slide 3: Important Information
Important Information You must read this notice before reading or making any use of this Document or any information contained in this Document. By continuing to read, use or otherwise act on this Document, you agree to be bound by the following terms and conditions, including any modifications to t
Slide 4: KKR Credit Income Fund Market Update - Presenter
For personal use only KKR Credit Income Fund Market Update Jeremiah Lane Partner, Credit Investing Team (San Francisco) 3
Slide 5: Fund Updates
Fund Updates Buyback For personal use only • KKR as Manager and the responsible entity believe that the current KKC ASX unit price does not reflect the fair value of the underlying assets held by KKC • As a result, the Responsible Entity has announced that there will be a A$20m buyback programme Dis
Slide 6: KKC Performance Update
KKC Performance Update KKC NTA Since Listed on the ASX For personal use only 2.60 2.50 2.40 2.30 2.20 2.10 2.00 1.90 1.80 A$ 1.70 1.60 1.50 1.40 1.30 1.25 1.20 1.10 1.00 21-Nov-19 5-Dec-19 19-Dec-19 2-Jan-20 16-Jan-20 30-Jan-20 13-Feb-20 27-Feb-20 12-Mar-20 26-Mar-20 9-Apr-20 23-Apr-20 7-May-20 21-M
Slide 7: NTA Attribution
NTA Attribution(1) % Change in Original A$925m NTA since listed on the ASX At Different Times For personal use only Before Full Ramp Post Full Ramp Covid Sell-Off Recovery Today 10.0% 10.0% 5.0% 5.0% +2.1% % Change in NTA since listed on the ASX -1.1% 0.0% 0.0% -0.5% -5.0% -5.0% -10.0% -8.6% -10.0%
Slide 8: KKC - Current Portfolio Positioning
KKC - Current Portfolio Positioning SENIOR vs. SUBORDINATED FLOATING vs. FIXED ASSET TYPE DIVERSIFICATION Key Points For personal use only 3% • 90% senior in capital structure 8% 7% 40% 37% • Majority of portfolio is floating rate 27% 63% 60% • Greater focus on loans 55% • No new defaulted positions
Slide 9: How Does It Look From Here?
For personal use only How Does It Look From Here? 8
Slide 10: Credit Still Looks Attractive vs. Other Asset Classes
Credit Still Looks Attractive vs. Other Asset Classes Yield Across Various Asset Classes over Time Yield Across Various Asset Classes For personal use only 25 8.00% 20 6.00% Yield to Maturity (%) Yield to Maturity (%) 4.9% 15 4.4% 4.00% 3.7% 10 2.4%2.4% 1.9% 2.00% 5 1.1%1.0% 0 0.00% Mar-98 Mar-99 Ma
Slide 11: And Offers an Attractive Risk Reward
And Offers an Attractive Risk Reward Yield to Maturity vs. Interest Rate Duration For personal use only 6.00% 5.00% High Yield Leveraged Loans 4.00% Yield to Maturity Emerging Markets 3.00% Investment Grade Bonds REIT 2.00% CMBS ABS 1.00% US Treasury 0.00% 0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0
Slide 12: Low Correlation to Recent US Treasury Movements
Low Correlation to Recent US Treasury Movements Correlation to 10-Year US Treasury (GA10) For personal use only January 2020 – February 2021 (12-Month Moving Windows, Computed Monthly) 1.20 Sample ETF’s 1.00 iShares Bond ETF 0.80 0.60 0.40 Correlation to Rates Vanguard LT Bond ETF Correlation 0.20 0
Slide 13: Deeper Dive into High Yield Performance by Rating
Deeper Dive into High Yield Performance by Rating(1) Ratings Evolution of KKC Exposures US HY Performance: Rebased on 31 Jan'20 For personal use only 100% 115% 90% 20% 109% 110% 109% US HY Performance: Rebased on 31 Jan'20 108% 80% 106% 105% % of Portfolio by Market Value 70% 100% 60% 43% 95% 50% 90
Slide 14: Scenario Analysis: GFC vs. COVID
Scenario Analysis: GFC vs. COVID Returns During Periods of Volatility(1) For personal use only KKR (GFC) Market (GFC) KKR (Covid) Market (Covid) 30.00% 20.00% 10.00% Cumulative Returns (%) 0.00% -10.00% -20.00% -30.00% -40.00% T+1 T+2 T+3 T+4 T+5 T+6 T+7 T+8 T+9 T T-6 T-5 T-4 T-3 T-2 T-1 T+10 T+11 T
Slide 15: The Opportunity
The Opportunity Value in ‘No Man’s Land’ by Providing Liquidity Where Others May Not Go For personal use only Market Buyers No Man’s Land Absolute Return Buyers 110% 100% Illustrative Bond Price 90% 80% 70% 60% 50% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Illustrative Return Note: For illustrative pur
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