Why KKR Is Cutting Its Leveraged Loan Exposure

The video discusses KKR's shift from overweight to neutral in leveraged loans, highlighting the significance of this move given KKR's prominence in the leveraged buyout market. It notes the recent investor interest in leveraged loans, evidenced by inflows into the BKLN ETF and a significant market rally. The video contrasts public credit, like high yield bonds, with private credit, suggesting public credit more accurately reflects the anticipated economic downturn. KKR seeks flexibility to navigate different financial instruments based on risk pricing, reflecting a cautious approach amid market uncertainty.

What does the recent performance of the BKLN ETF indicate about investor sentiment?

In what ways do investors' strategies differ when dealing with leveraged loans and high yield bonds?