K-FIT Redemptions: KKR FS Income Trust Paid About 80% in Q1 2026, Then 100%. Its Sister Fund Paid 20% of Distributions From Capital

What K-FIT and K-FITS are

Both are business development companies, not REITs: they lend to private companies, mostly through first-lien loans, and K-FIT's March 2026 letter put the mix at about 70% U.S. direct lending and 25% asset-based finance. Both are managed by FS/KKR Advisor, LLC, and the K-FITS letter calls K-FIT a “separate business development company” that “participates in the same investment strategy.” Neither is registered for public sale. Each sells shares at the start of every month in a continuous private offering of up to $5.0 billion to accredited investors, and the tender documents include a separate cover letter for Morgan Stanley clients. K-FIT had 2,829 record holders and K-FITS 5,386 at February 28, 2026 (their 2025 10-Ks).

The difference that matters for a holder is cost. K-FITS pays distribution and servicing fees ($3,983 thousand in the first half of 2026, per its 10-Q), a line K-FIT's statement of operations does not have, which is part of why its NAV, income and distribution are all lower. There is no market for either. The exit is the quarterly tender, which the board decides each quarter and which is capped at 5% of shares outstanding at the previous quarter-end.

Sixteen tenders, one proration

Each row is the final result the fund filed in its Schedule TO-I/A. Price is NAV per share at the quarter-end valuation date; shares issued within the past year (other than reinvested distributions) are bought at 98% of NAV, the “early repurchase deduction.”

The March 2026 result does not give the number of K-FIT shares tendered, only that the fund bought “approximately 80%” of them; at 2,591,829 shares accepted that implies roughly 3.2 million tendered (our arithmetic). The fund's letter of March 31 put requests at about 6.3% of shares and added the rule every holder should know: “Unfulfilled repurchase requests do not automatically carry over to the next repurchase offer.” A holder cut back in March had to tender again in June.

Three things stand out. First, the K-FIT queue was a one-quarter event: requests went from about 6.3% to about 1.65% of shares, and the June offer was only a third used (930,353 of 2,819,258 shares, our arithmetic). Second, K-FITS never prorated, but its holders kept asking for more: requests rose from 254,595 shares in December 2025 to 1,350,592 in March and 1,392,808 in June, 73% and 69% of each offer's limit. Third, one of K-FIT's largest holders left in the March tender. Bayshore Capital Advisors' Schedule 13G/A of April 2026 reports 483,255.81 shares, 0.92% of the class, and says it fell below 5% “as a result of dilution from company share issuance and from participation in the company's tender offer.” NextEra Energy, through Florida Power & Light, reported 3,483,107 shares (6.3%) at February 23, 2026 in its Schedule 13D/A.

The money that stopped coming in

A 5% quarterly exit is easy to fund while new money arrives every month. Each fund reports its monthly sale in an 8-K, and the series shows what changed.

Apart from one large K-FIT closing in June 2026 ($81.3 million), monthly sales since April 2026 have run at $4-12 million per fund, against $25-125 million a year earlier. In the three closings from July to September 2026, K-FIT took in $20.9 million and K-FITS $23.3 million; a year earlier the same three months brought $253.2 million and $146.5 million (our sums). The second-quarter tenders alone paid out $27.0 million and $34.6 million. At K-FITS, share transactions were a net outflow of $2.2 million in the second quarter even after reinvested distributions (10-Q), and the third-quarter offer is for fewer shares than the second (2,025,462 against 2,030,181), because shares outstanding fell.

The funds' letters frame the same period more warmly. K-FIT's June 30 letter says first-half gross subscriptions “amassed approximately $195 million which is 1.9x the amount of total repurchases”; K-FITS's says approximately $78 million, 1.1x. Those totals match the closings from February 2 through July 1 in the 8-Ks (our arithmetic: $194.5 million and $77.9 million), not January through June, which the 10-Qs put at $245.5 million and $110.9 million. Either way, the direction since spring is the same.

Distributions: one cut each, and return of capital at K-FITS

Both funds cut once, effective with the December 31, 2025 record date: K-FIT from $0.25 to $0.225 a month (10%) and K-FITS from $0.20 to $0.175 (12.5%), unchanged through the $0.225 and $0.175 declared on September 4, 2026 for the September 30 record date. At the August NAVs that is about 9.3% a year for K-FIT and 8.5% for K-FITS (our arithmetic).

The K-FITS tax-basis table is the line a holder should read twice: of $41,895 thousand of cash distributions in the first half of 2026, $33,663 thousand came from net investment income and $8,232 thousand, 20%, from return of capital; in the first half of 2025 it was 100% income. Its balance sheet moved from $5,161 thousand of retained earnings at December 31, 2025 to an accumulated deficit of $24,916 thousand at June 30, 2026. K-FIT's table shows 100% from net investment income in both periods, and its March letter said distributions over the trailing twelve months were fully funded by ordinary income.

Most of the drop in income is the end of the adviser's help. In the first half of 2025 it waived $13,030 thousand of K-FIT's management and incentive fees and $7,405 thousand of K-FITS's fees and expenses; in 2026 it waived nothing. Credit has not been the problem so far: K-FIT reported 0.0% of its portfolio on non-accrual at June 30, 2026 and asset coverage of 264% (K-FITS 276%), against a 150% legal minimum. Both renegotiated their main bank lines in 2026 at a slightly higher spread, 2.25% over the benchmark instead of 2.125% (K-FIT on May 28, K-FITS on September 30, when it also raised commitments from $325 million to $375 million and pushed maturity to September 30, 2031).

NAV, month by month

The largest monthly step was March 2026, when K-FIT lost $0.31 and K-FITS $0.34 a share. Since June both have been flat to slightly up.

Three small inconsistencies in the filings, none of which changes the numbers above. K-FIT's final amendment of April 28, 2025 describes the first-quarter 2025 offer as being for 1,043,143 shares, the previous quarter's figure; the original Schedule TO-I says 1,402,588. K-FITS's 8-K of August 21, 2026 gives its July 31 aggregate NAV as “approximately $986.7 billion,” which can only mean million. And K-FITS's monthly 8-Ks have called its shares Class I since December 2025, while its June 10-Q calls the same shares Class S.

What a holder can do with this

• If you tendered in Q3 2026: the offers expired September 29. The price is NAV at September 30, published in the late-October 8-K. On this year's pattern the first amendment with the result comes within about a week (April 1 and July 6) and the final one with the cash figure about three and a half weeks after quarter-end.
• If you were cut back in March and did not resubmit: nothing carried over. The next offer will be for 5% of shares at September 30, 2026, likely announced in early December on the funds' pattern.
• If you hold K-FITS for income: look at the third-quarter 10-Q (due in November) for whether the return-of-capital share of distributions keeps rising. Return of capital lowers your cost basis rather than being taxed now, but it also means the fund is paying out more than it earns.
• What would change the math: monthly sales recovering, requests rising back above 5% at K-FIT, or the board offering less than 5%, which it can do each quarter.

Other funds, same quarters: the private credit redemptions tracker lines up the latest offers side by side, and HLEND and BCRED each have their own quarter-by-quarter series. KKR's real estate fund is a different vehicle with its own page: KREST.

FAQ

All figures are from SEC filings by KKR FS Income Trust (CIK 1930679) and KKR FS Income Trust Select (CIK 1975736) read on EDGAR on October 5, 2026: eighteen Schedule TO-I offers and their final Schedule TO-I/A amendments (September 2024 to September 2026), the shareholder letters filed as Exhibit (a)(1)(vii) on April 1 and July 6, 2026, the monthly Form 8-Ks on NAV, private-offering sales and distributions (December 2024 to September 2026), the June 30, 2026 Forms 10-Q (accessions 0001628280-26-056131 and 0001628280-26-056136), the 2025 Forms 10-K, the credit-facility 8-Ks of June 3 and October 2, 2026, and Schedule 13D/A (NextEra Energy, February 24, 2026) and Schedule 13G/A (Bayshore Capital Advisors, April 28, 2026). Implied tendered shares, request-to-limit ratios, sums of monthly sales, yields and percentage changes are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.