KKR’s Income Opportunities Fund to acquire Insight Select Income Fund
KKR’s Income Opportunities Fund (KIO) will acquire Insight Select Income Fund (INSI) in a deal which will see INSI shareholders moved into KKR’s fund.
Under the terms of the agreement, shareholders of INSI may also choose to receive up to five per cent of the consideration in cash.
Once the transaction closes, INSI will no longer have its shares listed on any public market.
Following the acquisition, KIO will continue to invest in first- and second-lien secured loans, unsecured loans and high yield corporate debt instruments and will continue to trade on the New York Stock Exchange under its current ticker symbol.
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“We are excited to welcome the INSI shareholders to the KIO shareholder base,” said Jeremiah Lane, co-head of global leveraged credit at KKR.
“We see a compelling opportunity in credit and are confident we can continue to deliver strong outcomes in the years ahead.”
KKR and Insight said that the acquisition will result in more than $500m (£382.58m) in net assets being held in the fund, which may allow it to benefit from additional investment opportunities to seek to enhance its earnings profile.
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The combined fund is also expected to have a higher share count than either KIO or INSI individually, which may lead to improved trading liquidity.
Furthermore, the firms claim that KIO shareholders are expected to benefit from economies of scale in KIO’s operations and lower operating expenses, as well as gaining access to KKR’s scaled credit platform and differentiated credit sourcing capabilities.
“We are pleased to announce this transaction with KKR, which we believe will offer a compelling opportunity for INSI’s shareholders,” added David Leduc, chief executive of Insight North America.
“We have worked closely with the KKR team and have been impressed with their expertise and with KIO’s investment process.”
Dechert LLP advised both KKR and KIO on the transaction.
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