Overview
KKR Credit Advisors (US) LLC (“KKR Credit Advisors (US)”) is a Delaware limited liability company founded in August 2004 and registered as an investment adviser with the U.S. Securities and Exchange Commission (the “SEC”). KKR Credit Advisors (US) together with its relying advisers, participating affiliates and other affiliated entities listed in Item 10 are collectively referenced, together with the KKR Credit Managers (as defined below) as applicable, as “KKR Credit”. KKR Credit has approximately $68.8 1 billion in assets under management as of December 31, 2019, managed on a discretionary basis. KKR Credit advises pooled investment vehicles, dedicated separately managed account vehicles, collateralized loan obligation vehicles (“CLOs”), a closed-end investment company (the “RIC”) registered under the U.S. Investment Company Act of 1940, as amended (the “Investment Company Act”) and discretionary accounts established for third-party institutional investors. KKR Credit also provides sub- advisory services to a statutory trust that is registered under the Investment Company Act as a non- diversified, closed-end management investment company that operates as an interval fund, and certain investment funds and investment vehicles established and managed by Kohlberg Kravis Roberts & Co. L.P. and it affiliates (“KKR”), including a non-U.S. listed investment trust that has investment exposure to funds and investments managed by KKR and its affiliates. . KKR Credit’s investment management and advisory activities focus on U.S. and European leveraged credit strategies, such as leveraged loan and high yield bond strategies, alternative credit strategies (including investments in mezzanine and mezzanine-like instruments, structured and illiquid credit, and direct senior loan origination investments), specific types of syndicated credit investments (e.g., investments in revolver credit facilities), special situations investments and credit investments relating to other assets held by funds and other investment vehicles and accounts managed by KKR, including private equity and real assets, such as infrastructure, energy and real estate.

KKR Credit is affiliated with KKR & Co. Inc. (formerly KKR & Co. L.P.) (“KKR & Co.” or the “Public Company”) which, through its subsidiaries, acquires stakes in, or seeds, or otherwise holds interests in third-party hedge funds and fund of fund managers (the “Stakes and Seed Managers”).

KKR Credit Advisors (Ireland) Unlimited Company (“KKR Credit Advisors (Ireland)”), which is also regulated by the Central Bank of Ireland (“CBI”), provides discretionary investment management services to a number of pooled investment vehicles, separately managed accounts and CLOs pursuing primarily European credit strategies including investments in European leveraged loans and high yield bonds, alternative credit opportunities such as investments in mezzanine-like instruments, originated senior loans and specific types of syndicated credit investments (e.g. investments in revolver credit facilities) and other structured and illiquid credit investments.

KKR Credit owns a 50% interest, alongside an affiliate of Franklin Square Holdings, L.P. ("FS Investments") who owns the other 50% interest, in FS/KKR Advisor, LLC, an investment adviser registered with the SEC. FS/KKR Advisor provides investment advisory services to two business development companies registered under the Investment Company Act (“BDC”), FS KKR Capital Corp., a BDC listed on the New York Stock Exchange ("NYSE") and FS KKR Capital Corp. II, a non-traded BDC resulting from a December 2019 merger of four BDCs advised by FS/KKR Advisor. . 1 Represents KKR Credit’s most recently published AUM as disclosed in Part 1. AUM calculations could differ from those used in other regulatory filings by KKR Credit in accordance with applicable requirements and guidelines. KKR Credit is affiliated with KKR Alternative Investment Management Unlimited Company (“KKR AIM”), which is regulated by the CBI, is an authorized European Union (“EU”) alternative investment manager, and separately files reports as an exempt reporting adviser with the SEC. KKR AIM enters into delegation and/or sub advisory agreements with KKR Credit under which KKR will provide certain portfolio management services to KKR AIM in connection with investment funds with respect to which KKR AIM serves as alternative investment fund manager for the purposes of the EU Alternative Investment Fund Managers Directive (“AIFMD”). KKR Credit Advisors (US) is affiliated with KKR and its subsidiaries, which operate under the name “KKR”. KKR advises and sub-advises private equity funds and other investment vehicles, including proprietary entities that invest capital for long-term appreciation, primarily either through controlling ownership of companies or minority positions. Such funds also make investments in publicly traded equity and debt securities and other marketable securities and instruments (collectively with any investments in derivative instruments, “Marketable Securities”). In addition, to its traditional private equity strategy, KKR advises funds and other investment vehicles focused on infrastructure, energy and real estate, which invest capital primarily through acquiring interests in companies or acquiring underlying assets. KKR also advises investment funds and other investment vehicles that make growth capital and core investments. KKR also advises vehicles that make real estate debt investments, including real estate investment trusts (“REITs”). KKR also offers and sponsors funds and other investment vehicles that make co-investments alongside KKR proprietary investments or in specific or multiple portfolio companies and other assets invested in by investment funds advised by KKR and its affiliates, a customized platform that invests in funds advised by KKR and its affiliates and funds sponsored and managed by unaffiliated investment managers (collectively, “third party funds”) and related co-investments, and strategic partnership vehicles or other multi-strategy or multi-asset arrangements that invest across multiple funds and investment strategies advised by KKR and its affiliates KKR’s Global Institute (“KGI”) periodically publishes papers, highlighting views from KKR’s portfolio companies and portfolio managers and political, economic and social trends. KKR’s Global Macro and Asset Allocation Group also periodically publishes commentary on macro-economic trends and related topics through KGI and oversees a proprietary portfolio of investments in a variety of instruments and securities.

KKR Credit also has an affiliated capital markets business operated through affiliated broker-dealers. Please see Item 10 - Other Financial Industry Activities and Affiliations for additional information regarding KKR’s affiliated broker dealers.

KKR Credit also has a proprietary trading business. Please see Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading for additional information regarding KKR’s proprietary investment activities.

With limited exceptions in connection with certain sub-advisory relationships, KKR Credit does not manage client assets on a non-discretionary basis as of December 31, 2019, although certain clients have consent, or opt-out, or opt-in rights with respect to certain investments. Ownership/Structure KKR Credit Advisors (US) is wholly owned by KKR. KKR is a subsidiary of KKR Group Partnership L.P. (“KKR Group Partnership”) and an indirect subsidiary of the Public Company, which is listed on the New York Stock Exchange (“NYSE”). Effective as of July 1, 2018, the Public Company and its subsidiaries completed an internal reorganization (the “Reorganization”) following KKR’s conversion from a Delaware limited partnership to a Delaware corporation on July 1, 2018. In the Reorganization, KKR Management Holdings L.P. (the former general partner of Kohlberg Kravis Roberts & Co. L.P.) and KKR International Holdings L.P., which were former intermediate holding companies for the Public Company’s business, were combined with the other intermediate holding company, KKR Fund Holdings L.P., which changed its name to KKR Group Partnership L.P. KKR Management LLP (formerly KKR Management LLC) remains the sole holder of Class B common stock of the Public Company, which is the only class of common stock entitled to vote for the election of directors and other matters generally. KKR Holdings L.P. (“KKR Holdings”) holds Class C common stock of the Public Company (as well as the ownership interests described below). Holders of the preferred stock and Class A common stock of the Public Company (which include KKR affiliates, employees, and their related persons) hold 100% of the ownership interests in the Public Company. As of January 1, 2020, the Public Company indirectly held approximately 66% of the ownership interests in KKR Group Partnership, which holds the operating businesses of the Public Company’s subsidiaries. As of January 1, 2020, the remaining ownership interests in the KKR Group Partnership were held indirectly by KKR Holdings and KKR Associates Holdings L.P. (“KKR Associates Holdings”). KKR Holdings and KKR Associates Holdings are owned by certain KKR senior employees and their related persons.

KKR Credit Advisors (Ireland) is an indirect subsidiary of KKR Group Partnership, which is in turn, an indirect subsidiary of the Public Company.
Nature of KKR Credit’s Clients
KKR Credit provides investment management, advisory and administrative services directly and indirectly through wholly-owned and controlled management entities established with respect to one or more Clients for operational and other purposes (“KKR Credit Managers”). KKR Credit generally provides these services (i) through affiliated general partners or managing members (“KKR Credit GPs”) and/or through KKR AIM, as applicable, in respect of investment funds, and dedicated investment vehicles established for institutional investors and certain high net worth investors sponsored and managed by KKR Credit (“KKR Credit Funds”), (ii) as adviser to the RIC, (iv) as adviser to a number of CLO vehicles, (v) as sub adviser to discretionary accounts established for third party institutional investors, and (vi) as adviser directly to other institutional clients, including U.S. and non-U.S. pension plans and sovereign wealth funds (“Other Clients”), pursuant to contractual relationships, such as investment management agreements. KKR Credit Funds are typically U.S. and non-U.S. investment limited partnerships, companies, limited liability companies and other vehicles that are not registered or required to be registered under the Investment Company Act with the exception of the RIC. The offering of the securities of the KKR Credit Funds are also typically not required to be registered under the United States Securities Act of 1933, as amended (the “Securities Act”) with the exception of the RIC. For purposes of this brochure, the term “KKR Credit Funds” includes the RIC. KKR Credit Funds and the Other Clients are collectively referred to in this brochure as KKR Credit’s ‘Other Clients’. KKR Credit also provides sub-advisory services to a statutory trust that is registered under the Investment Company Act as a non-diversified, closed-end management investment company that operates as an interval fund, and certain investment funds and investment vehicles established and managed by KKR, including an Australian listed investment trust which is listed on the Australian Securities Exchange. KKR Credit also, through KKR Credit GPs, provides certain operational and administrative services to co-investment vehicles that are not advisory clients of KKR, such as syndicated capital co-investment vehicles and syndication sidecars, as described in Item 11 – Allocation of Investment Opportunities, through which third-party investors co-invest alongside KKR Credit Funds and Other Clients. KKR Credit Advisors (US) does not participate as a manager in any wrap fee programs.
Investment Mandates
The terms upon which KKR Credit serves as investment manager or advisor of a KKR Credit Fund or Other Client are established at the time each KKR Credit Fund or Other Client relationship is established and are generally set out in the governing documents entered into by KKR Credit with respect to the relevant KKR Credit Fund or Other Client and disclosed in the offering or disclosure documents for the relevant KKR Credit Fund or Other Client, as applicable. These terms, which vary among each KKR Credit Fund and Other Client, could limit the investments KKR Credit can invest on behalf of the relevant KKR Credit Fund or Other Client based on security classes, geographies, concentration limits, leverage limits and/or other criteria, among others. please register to get more info

General
KKR Credit (including the KKR Credit GPs) generally receives management fees, carried interest allocations and/or performance fees in connection with the investment management and administrative services KKR Credit provides to KKR Credit Funds or Other Clients. Certain co-investment vehicles and KKR Credit Associates Vehicles (as defined in Item 6 - Incentive Allocations and Side-By-Side Management), as discussed in Item 6, are not subject to such fees and/or carried interest allocations. The allocation of a portion of the profits of a KKR Credit Fund, whether allocated to the capital account of a KKR Credit GP or distributed to a KKR Credit GP is referred to herein as “carried interest.”

Management fees, carried interest, performance fees and other compensation payable to KKR Credit (including KKR Credit GPs) by KKR Credit Funds or Other Clients together with other terms governing the management of KKR Credit Funds or Other Clients by KKR Credit, are established by KKR Credit at the time of the establishment of the relevant KKR Credit Funds (and negotiated with participating investors prior to their investment) or at the beginning of the advisory relationship with the relevant Other Clients, as applicable. Specific details of such compensation and its method of calculation are set out in the offering materials, disclosure documents, advisory agreements, investment management agreements and/or governing documents of the relevant KKR Credit Funds or Other Clients and vary among KKR Credit Funds or Other Clients. Fee terms of KKR Credit Funds or Other Clients have been, and will generally be changed during the term of the relevant relationship. The share of compensation earned by KKR Credit or its affiliates in respect of a KKR Credit Fund or Other Client varies among investors in such KKR Credit Fund pursuant to the terms of the governing documents, side letter agreements or other arrangements with specific investors in such KKR Credit Fund whereby such investors receive direct or indirect reductions of management fees or other compensation otherwise payable with respect to their investments managed by KKR Credit. For example, each of KKR Credit, and KKR has entered into, and intends in the future to enter into, strategic partnerships or other multi-strategy or multi-asset class arrangements with investors that commit capital to a range of KKR Credit’s, and KKR’s platform of products, investment ideas and asset classes. Such arrangements generally (subject to applicable terms) include KKR Credit or KKR granting certain preferential terms to such investors, including blended fee and carried interest rates that are lower than those applicable to other investors in a particular KKR Credit Fund and/or investment fund managed by KKR, as applicable, when applied to the entire strategic partnership. Where a strategic investor participates in a KKR Credit Fund, investment fund managed by KKR through a dedicated investment vehicle or account as part of such arrangement, such investment vehicle or account will generally (subject to applicable terms) be granted terms, including management fees or carried interest, that are more favorable than those applicable to other investors. In cases where a strategic investor’s management fees and carried interest are due at the level of such vehicle and account, such terms will generally (subject to applicable terms) include a waiver of management fees and carried interest on such strategic investor’s investment in KKR Credit Funds, investment funds managed by KKR. In addition, where a strategic partner enters into such an arrangement with KKR Credit or KKR, other investors in KKR Credit Funds will not be notified or receive documentation of such an arrangement. Please see Item 11 – Other Conflicts of Interest for further information regarding strategic partnerships. In addition, KKR Credit enters into arrangements with one or more third- dedicated feeder vehicles to facilitate the indirect participation in a KKR Credit Fund by certain “high net worth” investors and other qualified Clients of such sponsor (each a “Dedicated Feeder”). Such third parties are expected to also solicit a direct investment in a KKR Credit Fund by certain of its Clients in consideration of the payment of a placement fee from KKR Credit or such KKR Credit Fund (each, a “Placed Investor”). In connection with the admission of any Dedicated Feeder to a KKR Credit Fund, the applicable KKR Credit GP will determine, in its discretion, whether to aggregate the indirect capital commitments of the investors in such Dedicated Feeder, including, without limitation, for purposes of calculating any reductions in management fees to which such Dedicated Feeder is entitled. In connection with the foregoing, there have been circumstances in which reductions, if any, are provided on an aggregated basis with respect to some, but not all, Dedicated Feeders, which would have the effect of establishing more favorable economic terms with respect to such Dedicated Feeders as compared to those applicable to other comparably sized Dedicated Feeders. Further, reductions in management fees generally do not apply to Placed Investors, but will be granted to Placed Investors at KKR Credit’s sole discretion. Certain third party sponsors receive placement fees, finder’s fees, manager charges and other payments which comprise organizational expenses allocable to the relevant Dedicated Feeders and which, in turn, will reduce management fees with respect to such Dedicated Feeders. KKR Credit does not control the economic terms of such Dedicated Feeders, which are established independently by the relevant third parties and their underlying investors. In certain circumstances, such terms require third parties to use such payments in whole or in part to offset incremental fees and expenses applicable at the level of the relevant Dedicated Feeders or to otherwise pass on such fees and expenses to the benefit of the Dedicated Feeders and their investors.
Management Fees
Management fees compensate KKR Credit generally for the various services KKR Credit’s business professionals provide in managing KKR Credit Funds or Other Clients. Typically, KKR Credit charges management fees at an annual rate of between 0.10% and 1.75% of the capital committed to, the net asset value of, the net invested capital of, the aggregate collateral balance of or the collateral pledged by the relevant KKR Credit Fund or Other Client, depending, in particular, on the strategy of the relevant KKR Credit Fund or Other Client, the amount of assets being placed under management with KKR Credit and the point in time in the life cycle of the relevant KKR Credit Fund or Other Client account. For example, for certain KKR Credit Funds, investors in the same fund pay different management fees based on whether they invested in an early or later round of fundraising and the amount of their investment or the amount invested by investors with the same discretionary manager or consultant, with earlier or larger investors (or groups of investors) potentially paying lower management fees than other investors. . KKR Credit will, from time to time, accrue management fees for a given payment period but defer collecting such fees until a later payment period primarily for administrative purposes. KKR Credit generally does not charge interest on such deferred management fees. The KKR Credit GPs generally make capital calls on investors in KKR Credit Funds for the amount of management fees payable by the KKR Credit Funds to KKR Credit and then cause the KKR Credit Funds to pay the amounts received from the investors to KKR Credit, consistent with the governing documents of the KKR Credit Funds. KKR Credit generally invoices Other Clients for management fees. In some cases, management fees due to KKR Credit are deducted from proceeds otherwise distributable to investors in a KKR Credit Fund or Other Client or paid out of the assets of such KKR Credit Fund or Other Client, consistent with the governing documents of such KKR Credit Fund or Other Client. If a KKR Credit Fund obtains a subscription facility, management fees due from a KKR Credit Fund are also paid by drawdowns by KKR Credit (or relevant KKR Credit GP) under such KKR Credit Fund’s subscription credit facility (which drawdowns are subsequently repaid through capital calls or investment proceeds) if consistent with the governing documents of such KKR Credit Fund or Other Client. KKR Credit receives from the RIC a management fee, payable monthly, at an annual rate of 1.10% of the RIC’s managed assets, as defined in the RIC’s prospectus. For some KKR Credit Funds or Other Clients where management fees are paid in advance with respect to a KKR Credit Fund or Other Client, the terms applicable to the relevant KKR Credit Fund typically do not contemplate repayments of fees to the extent that KKR Credit’s services terminate (or an investor withdraws or redeems its interests in such KKR Credit Fund or Other Client) prior to the end of the relevant payment period, particularly with respect to closed-end KKR Credit Funds. Where management fees are based on committed capital or the remaining invested capital of a KKR Credit Fund, the management fee payable by such KKR Credit Fund will be due to KKR Credit even if the fair value of the relevant remaining investments is below cost or even zero.

Management fees payable to KKR Credit by certain KKR Credit Funds or Other Clients are also offset by certain other compensation received by KKR Credit or its affiliates that relate to the relevant KKR Credit Fund or Other Client and its activities or by certain organizational and other expenses borne by the KKR Credit Fund or Other Client. Certain KKR Credit Funds or Other Clients invest in securities issued by other KKR Credit Funds (including, in particular, CLOs). Management or advisory fees or performance-based compensation received by KKR Credit from such other KKR Credit Funds generally are but might not be related to the investing KKR Credit Fund or Other Client.

Carried Interest Allocations

KKR Credit (including the KKR Credit GPs) also generally receives carried interest allocations or other performance related compensation from KKR Credit Funds or Other Clients (other than certain co- investment vehicles and KKR Credit Associates Vehicles) of up to 20% of profits third-party investors earn on their investments in KKR Credit Funds. Carried interest allocations in particular are generally subject to preferred return hurdles, catch-up allocations, and/or claw-backs, depending, among other things, on the strategy and structure of the relevant KKR Credit Fund. KKR Credit GP’s typically receive carried interest allocations for profitable portfolio company investments. Profitable investments realized early in the life of a KKR Credit Fund or Other Client could be followed by the poor performance of investments realized later in the life of a KKR Credit Fund or Other Client, which would reduce the KKR Credit Fund’s or Other Client’s overall profitability or cause it to be unprofitable. If this were to result over the life of a KKR Credit Fund or Other Client in KKR Credit having received more than the agreed-upon percentage of the relevant KKR Credit Fund’s or Other Client’s total profits, or the hurdle performance rate required by the KKR Credit Fund’s or Other Client’s terms not being met, KKR Credit will typically be required to reimburse (i.e., have clawed back) all or an appropriate portion of the carried interest allocations received by it, net of taxes, to ensure that KKR Credit does not receive a greater share of profits than agreed upon under the governing documents of such KKR Credit Fund. With respect to KKR Credit Funds structured as hedge funds and other comparable open-ended investment vehicles, KKR Credit receives performance fees based on realized and unrealized profits generated by such KKR Credit Fund in the relevant performance period. The terms of such KKR Credit Funds will typically not require any reimbursement or claw-back of performance fees if such unrealized profits are reversed in whole or in part during subsequent performance periods however in order for performance fees to be earned in subsequent performance periods, previous negative performance might need to be recovered, consistent with the terms of the organizational documents with respect to such KKR Credit Funds. KKR Credit does not receive any performance fees with respect to the RIC.
Portfolio Company-Related Fees
In addition to management fees for operating KKR Credit Funds or Other Clients, KKR Credit or its affiliates, from time to time, receive fees for work on the development and execution of core strategies for portfolio companies and for projects to increase portfolio company value. These fees are often borne by (i) a specific portfolio company, (ii) holding companies or other vehicles through which certain, but not all, of the direct and indirect equity owners of the portfolio company invest or (iii) a specific KKR Credit Fund or Other Client and can be broken down generally into two categories: shared fees and non-shared fees (see discussion below). When such fees are borne by holding companies or other vehicles or by a specific KKR Credit Fund or Other Client, such KKR Credit Fund or Other Client will bear a greater portion of such fees than would be the case if the relevant portfolio company paid such fees as only the investors in the holding company (or KKR Credit Funds or Other Client) will bear the cost of such fees. In addition, if a portfolio company is unable to pay or declines to pay for certain services (including services rendered by Consultants (defined below) or Affiliated Brokers), then the relevant KKR Credit Fund or Other Client, as applicable, will be charged for such services, which will also result in a greater portion of such fees being borne by such KKR Credit Fund or Other Client than would otherwise have been the case.

A portion of the shared fees is generally offset against management fees payable by KKR Credit Funds or Other Clients, while non-shared fees do not reduce management fees. The overall amount of shared fees will also be reduced by certain sourcing and diligence expenses incurred by KKR Credit in pursuing unconsummated transactions for KKR Credit Funds or Other Clients. Portfolio company-related fees are paid regardless of a KKR Credit Fund or Other Client’s profitability and are not negotiated with investors in KKR Credit Funds or Other Clients, and will often be capitalized as part of the acquisition price of the relevant investment for consummated investments.

Shared Fees

Shared fees are fees for KKR Credit services, which offset management fees paid by KKR Credit Funds or Other Clients, and include transaction, monitoring, break-up and directors’ fees. KKR and its affiliates charge monitoring fees and transaction fees to portfolio companies, which are not generally negotiated on an arm’s length basis. KKR Credit Funds and Other Clients indirectly bear the costs of these fees. KKR Credit or its affiliates receive “monitoring fees” in exchange for providing KKR Credit portfolio companies with management, consulting, financial and other services.

Monitoring fee agreements are typically renewed automatically on an annual basis and typically include annual fee increases. A portfolio company’s EBITDA (earnings before income, taxes, depreciation, and amortization) is generally taken into account in determining the amount of applicable monitoring fees. Monitoring fees are frequently based on a percentage of EBITDA or a specific dollar amount.

On the occurrence of initial public offerings, sales or other change of control events related to the relevant company, KKR (or an affiliate) is typically entitled to all unpaid monitoring fees plus any unreimbursed expenses plus the net present value of future monitoring fees that would otherwise be payable by the relevant portfolio company (the “NPV Payment”). The NPV Payment is based on the net present value of the monitoring fees payable over a future fixed period calculated using discount rates equal to the yield on U.S. Treasury securities of like maturity based on the dates the fee payments would have been due. The fixed period of time used in the net present value calculation will typically be tied to the term of the relevant KKR Credit Fund or portfolio investment or in more recent agreements, a period within that term; however, in certain instances the calculation period has exceeded the relevant KKR Credit Fund’s (or investment’s) term. Under more recent monitoring fee agreements for portfolio companies of KKR Credit Funds and Other Clients, the fixed period of time used in the NPV Payment calculation described above will be the lesser of (i) the remaining term of the relevant monitoring agreement (the term for each monitoring agreement generally will be fixed as the end of the last year of a KKR Credit Fund’s term) and (ii) three- and-a-half-years from the date of termination of the monitoring agreement (the three-and-a-half-year-period reflects the average length of time that it took for KKR Credit’s recent mature private equity funds to exit portfolio companies fully following an initial public offering or strategic sale where the fund continued to own securities, reflecting what KKR Credit believes is a reasonable approximation for the average number of years during which KKR Credit has historically remained actively involved with such companies). An NPV Payment will generally only be taken in respect of a portfolio company or other issuer where KKR Credit (or KKR or another affiliate) expects to continue to provide ongoing services and advice to the issuer after there has been an initial public offering, sale or other change of control event. As such, an NPV Payment generally will only be taken if (i) the relevant KKR Credit Fund, Other Client, co-investment vehicles and KKR Credit proprietary entities retain, directly or indirectly, 10% or more of the stock or other equity interests in the issuer (or the surviving entity) immediately following the relevant event and (ii) an employee of KKR Credit, KKR or another affiliate or a co-investor employee or designee serves or is expected to serve as a member of, or observer at, the board of directors or similar governing body of the issuer (or the surviving entity) (or in the absence of such service or expected service, KKR Credit, KKR or another affiliate retains the right to appoint or nominate such a director or observer) immediately following the relevant event. The contractual provisions described above and the KKR Credit methodology are amended from time to time, in KKR Credit’s sole discretion.

KKR Credit or an affiliate (including KKR) also receives transaction fees for the work performed by KKR Credit or such affiliate in structuring investments in portfolio companies and with respect to significant transactions or exits for those portfolio companies or portfolio investments. Transaction fees are received in connection with the same portfolio company in which payments under a monitoring fee agreement are received. KKR Credit and its affiliates, such as an Affiliated Broker, have and could also receive fees in respect of administrative services provided to loan syndicates lending to the KKR Credit Fund or Other Client portfolio companies. Transaction fees are calculated as a percentage of the total enterprise value, or as a percentage of the aggregate price paid for the securities that are acquired by a KKR Credit Fund or Other Client. KKR Credit or its affiliates also from time to time receive “break-up” or similar fees in connection with unconsummated, canceled or terminated portfolio transactions. The agreements relating to the relevant transaction generally specify the amount and timing of such fees and such agreements generally contain conditions or limitations on such payment to KKR Credit or its affiliates.

KKR Credit periodically discloses to investors in certain KKR Credit Funds and Other Clients, if applicable, the amount of monitoring fees, transaction fees and break-up fees allocated to the KKR Credit Funds or Other Clients in which they have invested. Monitoring fees (including NPV Payments) and transaction fees are generally allocated among KKR Credit Funds, Other Clients and KKR Credit Associates Vehicles (and other participating KKR proprietary entities and co-investment vehicles, if applicable) based on ownership of the relevant portfolio company or investment to which they are charged. The amount of break-up fees is generally allocated among KKR Credit Funds, Other Clients, KKR Credit Associates Vehicles (and other participating KKR proprietary entities and co-investment vehicles, if applicable) based on the anticipated ownership of the relevant company or investment had the transaction been consummated. If the expected equity source is not known for such deal, the waterfall methodology for allocating sourcing and diligence expenses for the identified strategy of such deal will generally be used to allocate the breakup fee. In addition to the fees described above, certain officers and employees of KKR Credit (“Employees”) currently receive and are expected in the future to receive directors’ fees for serving on the boards of KKR Credit portfolio companies, holding vehicles and other entities in or through which KKR Credit Funds or Other Clients invest. These directors’ fees are generally offset against KKR Credit Fund management fees Such management fee offsets are not applicable to directors’ fees paid to KKR Capstone executives (as defined below) who serve on the boards of KKR Credit portfolio companies and such directors’ fees are permitted to be retained in whole or in part by the KKR Capstone executives. Management fees will not be reduced or offset to the extent any Employee (including any KKR Capstone executive) receives directors’ fees relating to the continued director service after a KKR Credit Fund or Other Client has exited a portfolio company or other entity and/or following the termination of such Employee’s or KKR Capstone executive’s employment with KKR. A portion of the monitoring fees, transaction fees and break-up fees allocated to KKR Credit Funds or Other Clients will generally reduce or offset management fees otherwise payable by investors in such KKR Credit Funds or Other Clients as described in the offering materials, disclosure documents and/or governing documents of the relevant KKR Credit Funds or Other Clients. The portion of allocable compensation that reduces or offsets management fees varies between KKR Credit Funds and Other Clients. KKR Credit will retain the portion of such compensation that is allocated to KKR Credit Funds or Other Clients that does not reduce or offset management fees as well as the allocated portion that is attributable to the relevant KKR Credit GP. KKR Credit retains such compensation to the extent it is allocable to KKR Credit Associates Vehicles (except in the case of certain older investment funds managed by KKR and its affiliates) or co-investment vehicles. Fees allocated to co-investment vehicles and KKR Credit Associates Vehicles will not be shared and will not offset the management fees payable by KKR Credit Funds or Other Clients.

Non-Shared Fees In addition to the shared fees described above, KKR Credit and its affiliates, RPM and other Consultants (each defined below) will also receive fees for services provided to portfolio companies. KKR Credit Funds and Other Clients indirectly bear the cost of these fees. Such fees do not offset management fees due from KKR Credit Funds or Other Clients. Examples of non-shared fees for services include fees for third-party replacement services (i.e. fees received by KKR’s Consultants and Affiliated Brokers that would have otherwise have been provided by other Consultants or broker dealers).

In addition, KKR Credit and its affiliates will also from time to time enter into participation or other “back- to-back” arrangements with third parties that provide services and products directly to or with respect to KKR Credit Funds and Other Clients and their portfolio companies, holding vehicles and other entities in or through which KKR Credit Funds and Other Clients invest and KKR Credit will receive fees from the third party in connection with such activities. Under these arrangements, although neither KKR Credit nor its affiliates will receive fees directly from KKR Credit Funds, Other Clients or their portfolio companies, holding vehicles and other entities in or through which KKR Credit Funds and Other Clients invest, KKR Credit or its affiliates could be viewed as indirectly receiving such fees from a KKR Credit Fund, Other Client or their portfolio companies or holding entities. Such fees do not offset management fees or carried interest distributions due from KKR Credit Funds or Other Clients. KKR Credit and its affiliates have an incentive to select third parties that are likely to engage KKR Credit and its affiliates in such arrangements. Please see also Item 11 – “Financial Interest in KKR Credit Fund, Portfolio Company or Other Client Transactions”.
KKR Capstone, RPM and Other Consultants
KKR Capstone Americas LLC (collectively with its related parties, “KKR Capstone”) provides consulting services to KKR and KKR Credit, investment funds managed by KKR and its affiliates and KKR Credit Funds, Other Clients and portfolio companies, holding companies and other entities (including non- controlled entities) in or through which KKR Funds, KKR Credit Funds, Other Clients and KKR Credit invest, and RPM Energy Management LLC (collectively with its related parties, “RPM”) provides operating and consulting services to KKR, KKR Credit, investment funds managed by KKR and its affiliates, KKR Credit Funds or Other Clients and certain portfolio companies and/or assets of the foregoing in the oil and gas industry. KKR Capstone provides services to portfolio companies that KKR and KKR Credit’s investment professionals do not otherwise provide, including, without limitation, replacement services. KKR acquired KKR Capstone effective January 1, 2020 and KKR Capstone is owned and controlled by KKR. KKR Capstone operating executives (“KKR Capstone executives”) became employees of KKR after KKR’s acquisition.

KKR Capstone executives are expected to receive compensation in the form of (x) grants of equity in one or more of the parent entities of KKR (including equity awards from the Public Company, which has listed certain securities on the NYSE), (y) a portion of the carried interest distributions received by KKR GPs that are part of KKR’s “carry pool” and/or (z) a profits interest in individual portfolio companies or assets of KKR Funds or Other Clients. KKR Capstone executives could serve on the boards of directors of the portfolio companies of KKR Credit Funds and Other Clients and in such cases will generally receive directors’ fees and other compensation (including in the form of fixed and incentive compensation) in connection therewith from such companies. They also serve from time to time as interim executives of portfolio companies and receive compensation in connection therewith. Such compensation received by KKR Capstone executives will generally not be shared with KKR Credit Funds or Other Clients or offset against management fees or carried interest distributions payable by KKR Credit Funds or Other Clients.

RPM is owned by its senior management and is not a subsidiary or an affiliate of KKR. RPM has an exclusive relationship with KKR. RPM provides advisory services to portfolio companies that KKR’s investment professionals do not otherwise provide, including, without limitation, replacement services. While KKR and its affiliates do not hold any voting/decision making rights or equity interests in RPM (and certain other Consultants), RPM (and certain other Consultants) will generally provide services to KKR and at the direction of KKR and its affiliates to portfolio companies, holding vehicles and other entities (including non-controlled entities) in or through which KKR Funds and Other Clients invest or to KKR designees on an exclusive basis and also receive services and support from KKR and its affiliates, which are likely to be provided on favorable or below market rates. For example, KKR has in the past, presently does and is expected to in the future provide loans to RPM, which loans have (or would be expected to have) below market interest rates and no stated payment schedule, provide administrative services to RPM at below market rates, enter into arrangements with RPM that provide for below market rent and allow RPM to participate in KKR’s insurance policies and employee benefit plans without passing through the full cost of the coverage to RPM.

RPM and/or employees of RPM are expected to receive in the future compensation in the form of (x) grants of equity in one or more of the parent entities of KKR (including equity awards from the Public Company, which has listed certain securities on the NYSE), (y) a portion of the carried interest distributions received by KKR GPs that are part of KKR’s “carry pool” and/or (z) a profits interest in individual portfolio companies or assets of KKR Funds or Other Clients. Any such compensation received by RPM will not be shared with KKR Funds or Other Clients or offset against management fees or carried interest distributions payable by KKR Funds or Other Clients. Similar benefits could be afforded to other Consultants (as defined below) engaged in respect of KKR Credit Funds or Other Clients or their strategies, portfolio companies or assets. KKR Credit engages persons to provide various consulting services to KKR Credit Funds and other Clients (“Consultants”) including and in addition to KKR Capstone and RPM, including, without limitation, for sourcing, operational consulting, industry consulting, asset level consulting and operating services, debt servicing, engineering services, construction management, leasing management, development management, environmental compliance and remediation, purchasing and other property management or loan services, and general and administrative services, on terms similar to those described with respect to KKR Capstone and RPM. KKR Capstone, RPM and other Consultants are often involved in due diligence in connection with KKR Credit’s investment sourcing. KKR Credit engages and expects in the future to engage particular Consultants for multiple projects related to existing portfolio companies or potential investment opportunities. Consultants have included and could in the future include former employees of KKR Credit or its affiliates. Generally, KKR Capstone, RPM and certain other Consultants have master consulting agreements in place with KKR and/or KKR Credit for due diligence work and other projects, including non-implementation advisory or scoping work to identify and evaluate the potential for consulting or similar arrangements with existing portfolio companies and related operational changes and improvements contracted by KKR Credit on behalf of KKR Credit Funds or Other Clients and KKR Capstone have in the past and could in the future enter into engagement letters with KKR Credit Fund portfolio companies, holding companies and other entities (including non-controlled entities) for consulting services provided to such entities. Under those agreements and engagement letters, KKR Capstone, RPM and certain other Consultants are generally entitled to fees, other compensation and expense reimbursement (and, outside of the U.S., expenses can be determined as a fixed percentage of KKR Capstone’s fee for a specific engagement). Compensation for KKR Capstone (and other Consultants) will from time to time include a success fee (in the form of cash or equity) based on pre-agreed targets or milestones. While such fees and reimbursable expenses and other compensation paid to KKR Capstone and RPM are believed by KKR Credit to be reasonable and generally at market rates for the relevant activities, such compensation is not negotiated at arm’s length and from time to time are in excess of fees, reimbursable expenses or other compensation charged by comparable third parties. Other companies provide similar services as KKR Capstone, RPM and other Consultants, but KKR Credit believes they are less customized to the business of KKR Credit Funds and Other Clients.

Fees and compensation received by KKR Capstone, RPM and other Consultants are generally not shared with KKR Credit Funds or Other Clients or offset against management fees payable by KKR Credit Funds or Other Clients. Moreover, under the terms of more recent KKR Credit Funds or Other Clients, fees received by KKR Capstone, RPM or any Other Consultant would not be shared with KKR Credit Funds or Other Clients or offset against management fees payable by KKR Credit Funds or Other Clients in the event that KKR Capstone, RPM or any Other Consultant were to become a subsidiary or an affiliate of KKR. As noted above, KKR is in the process of evaluating a potential acquisition of acquired KKR Capstone on January 1, 2020.

With respect to operating partners, KKR Credit will generally retain such operating partners on an ongoing basis through a consulting or joint venture arrangement, which involve the payment of annual retainer fees. Further, such operating partners have in the past or may in the future receive success fees, performance- based compensation and other compensation for assistance provided by such operators in sourcing and diligencing investments for a KKR Credit Fund or Other Client and may co-invest alongside KKR Credit Funds and/or Other Clients. Such annual retainer fees, success fees, performance-based compensation and other costs of retaining such operating partners may be borne directly by a KKR Credit Fund or Other Client as fund expenses. Although an operating partner may be providing services on an exclusive basis to KKR Credit, a KKR Credit Fund or Other Client may have acquired an interest in such operating partner, members of such operating partner will not be treated as affiliates of the relevant KKR Credit GP for purposes of the governing documents of the KKR Credit Fund or Other Client. Accordingly, none of the compensation or expenses described above will be offset against any management fees or carried interest distributions payable to KKR Credit or its affiliates in respect of such KKR Credit Fund or Other Client. Such operating partners (including operating partners in which a KKR Credit Fund or Other Client could own an interest) will generally operate assets on behalf of a KKR Credit Fund or Other Client as well as other KKR Credit investment vehicles and may also operate assets for third parties, generally according to similar prevailing rates for such services, although the rates for such services often do not have readily available benchmarks for comparison. For further information, please see also “Platforms, Joint Ventures and Other Portfolio Asset Arrangements” below and in Item 8 - “Operating Partners and Joint Venture Partners.”
Affiliated Brokers
Affiliated U.S. and non-U.S. broker-dealers of KKR (including their respective related lending vehicles) (or “Affiliated Brokers” as defined in Item 10) manage or otherwise participate in underwriting syndicates and/or selling groups with respect to the securities and/or loans and debt instruments of portfolio companies and other non-controlled entities in or through which certain KKR Credit Funds or Other Clients invest, including in respect of securities or other instruments of such portfolio companies in which KKR Credit Funds or Other Clients have not have invested. Affiliated Brokers also manage or otherwise participate in underwriting syndicates and/or selling groups with respect to securities and/or loans and other instruments held directly or indirectly by certain co-investment vehicles. Further, Affiliated Brokers will be involved in the public offering or private placement of such securities and/or loans and other instruments, and/or sometimes provide capital markets advisory services to portfolio companies and other non-controlled entities in or through which KKR Credit Funds or Other Clients invest, including in connection with mergers, acquisitions, and restructurings; and will alone, or with other counterparties, which might include other KKR investment vehicles, third party banks or other unaffiliated finance providers, provide acquisition financing, lines of credit and other corporate lending or financing products and services to such entities in addition to financing provided through a KKR Credit Fund’s or Other Client’s investment. Affiliated Brokers also provide lines of credit to the portfolio companies of KKR Credit Funds and Other Clients portfolio companies through the Affiliated Brokers’ respective related lending vehicles. Such financing and underwriting services could also be provided to a third party in which a KKR Credit Fund or Other Client (or portfolio company) invests. Affiliated Brokers also provide syndication services to such entities including in respect of co-investments in transactions participated in by KKR Credit Funds or Other Clients. Affiliated Brokers will generally receive fees, including underwriting placement, syndication fees, transaction fees, commissions, underwriting discounts, interest payments and other compensation, payable in cash or securities and/or loans, in respect of the activities described above. Affiliated Brokers from time to time waive such fees. Affiliated Brokers and other KKR entities will, as a consequence of such activities, from time to time hold positions in instruments or securities and/or loans issued by portfolio companies. While such fees, commissions, interest payments and other compensation are believed by KKR Credit to be reasonable and charged at market rates for the relevant activities, such compensation is generally determined through negotiations with related parties. No compensation received by Affiliated Brokers for the foregoing activities is offset against management fees or otherwise shared with KKR Credit Funds or Other Clients. Affiliated Brokers do not share in any transaction fees or monitoring fees earned by KKR Credit, which are generally allocated among KKR Credit Funds, Other Clients and KKR Credit Associates Vehicles as discussed above. Please see Item 10 - Other Financial Industry Activities and Affiliations for further information regarding Affiliated Brokers.
Platforms, Joint Ventures and Other Portfolio Asset Arrangements
KKR Credit Funds or Other Clients form, enter into or invest in investment platforms, joint ventures, build- ups and other arrangements with third-parties or KKR Credit or its affiliates with respect to specified portfolio investments or categories of portfolio investments. In particular, such KKR Credit Funds or Other Clients invest in opportunities through joint ventures, investment platforms or build-ups that provide one or more of the following services: origination or sourcing of potential investment opportunities, due diligence and negotiation of potential investment opportunities and/or servicing, development and management (including turnaround) and disposition of investments. Such investments in joint ventures, platforms and build-ups are made in or alongside existing or newly formed operators, consultants and/or managers (collectively, “Platform Managers”) that pursue such opportunities. Platform Managers could be established or otherwise invested in by KKR proprietary entities and could therefore constitute affiliates of KKR or otherwise represent proprietary interests of KKR. As set forth in the governing documents for such KKR Credit Fund, fees paid to such Platform Manager will not reduce management fees or other fees or carried interest distributions payable to KKR Credit or its affiliates in respect of such KKR Credit Fund. KKR Credit Funds or Other Clients also invest in or own Platform Managers, which involve joint ownership with KKR proprietary entities and/or third-party investors. Similarly, such joint ventures, platforms and build-ups could include capital and/or assets contributed by KKR proprietary entities, KKR Credit Funds or Other Clients and/or Platform Managers and/or third-party investors (such joint ventures and investments in platforms and build-ups, collectively, “Platform Arrangements”). KKR Credit maintains policies and procedures to provide guidance to its investment professionals regarding the types of investments in Platform Arrangements and Platform Managers that are within the relevant investment strategies of KKR Credit Funds and Other Clients.

Platform Arrangements also include certain investment vehicles that, directly or indirectly, hold or otherwise participate in aircraft, ships or other hard assets or other financial assets or related financing arrangements (“Portfolio Asset Vehicles”) managed in whole or in part by joint venture partners or third party asset administrators, servicers or other persons (collectively, “Asset Servicers”) or otherwise pursuant to arrangements with such Asset Servicers. Asset Servicers are entitled to fees and other expense reimbursements for sourcing such portfolio investments, success fees or carried interest distributions in respect of such portfolio investments and/or other compensation tied to the success of such portfolio investments and/or servicing fees and expense reimbursements for assistance with due diligence of such assets, negotiation of financing relating to asset acquisitions, administration and other services provided in respect of the relevant assets (including in particular asset leasing services provided in respect of hard assets held through such vehicles) (collectively, “Asset Servicing Fees”). KKR Credit determines such compensation is appropriate where KKR Credit believes such Asset Servicers have particular expertise, capability or knowledge with respect to the relevant category of assets, they have sourced such assets, or for regulatory reasons, in order to assist KKR Credit in building relationships that KKR believes to be beneficial to a KKR Credit Fund or Other Client and/or that will create opportunities for future investments or otherwise optimize returns for such KKR Credit Fund or Other Client. Certain Asset Servicers have been established or otherwise invested in by KKR proprietary entities, and such asset services are therefore deemed to be affiliates of KKR Credit or otherwise represent proprietary interests of KKR. For example, affiliates of KKR Credit have made a proprietary investment into a joint venture partnership with a commercial aviation finance company which will provide services in respect of investment opportunities by certain KKR Credit Funds and Other Clients related to asset leasing arrangements for commercial aircraft, including assistance with sourcing of leasing opportunities and negotiating financing related to such opportunities as well as repurposing and maintenance services.

In connection with Platform Arrangements, personnel of platform companies, joint venture companies, partners or Platform Managers or other persons, including personnel of Platform Managers affiliated with KKR, or of other entities formed by KKR Credit or its affiliates to provide services to vehicles in which a KKR Credit Fund or Other Client holds an investment could receive management fees or other fees (including, without limitation, consulting, servicing and/or origination fees), performance-based payments (including, without limitation, carried interest, incentive fees and/or transaction fees), equity (including, without limitation, options, warrants and restricted stock) and/or other compensation (including, without limitation, salaries, bonus, benefits and/or reimbursement of expenses) from Platform Managers or other vehicles which manage or advise such Platform Arrangements or through which such Platform Arrangements invest or conduct their business. Certain Platform Managers provide services exclusively to one or more Platform Arrangements. KKR Credit Funds or Other Clients will bear the expenses of the Platform Arrangements and Platform Managers, such as formation costs, ongoing general or administrative costs (including compensation of related personnel, rent and other overhead), due diligence expenses, working capital costs and other related expenses in connection with backing the Platform Arrangements, and Platform Managers. Such expenses are borne directly by the relevant KKR Credit Funds or Other Clients (or as sourcing and diligence expenses, if applicable) or indirectly as KKR Credit Funds or Other Clients fund the startup and ongoing expenses of a newly formed portfolio company. Although a platform or build up portfolio entity is generally controlled by a KKR Credit Fund or Other Client, the compensation or expenses described above are not expected to be offset against any management or other fees or carried interest distributions payable to KKR Credit or its affiliates in respect of such KKR Credit Fund or Other Client.

The services provided by Platform Managers in respect of such Platform Arrangements have been and could be similar to and overlap with services provided by KKR Credit to KKR Credit Funds or Other Clients and a Platform Manager have and could also provide the same or similar services for assets owned by third parties, which could sometimes compete with KKR Credit Funds or Other Clients for investment opportunities. Multiple KKR Credit Funds or Other Clients could invest in the same Platform Arrangements. KKR Credit Funds or Other Clients could potentially realize investments held through Platform Arrangements (in whole or in part) through a sale of all or a portion of such Platform Arrangements or a disposition of assets held through such Platform Arrangements (including a payoff of any loans held through such Platform Arrangements), including to one or more KKR Credit Funds, Other Clients or third parties.

Certain Platform Managers and Asset Servicers include former KKR personnel, Senior Advisors) or Industry Advisors (each defined below), KKR Capstone executives or RPM, and such individuals are generally permitted to also provide the same or similar services with respect to other Platform Arrangements or Portfolio Asset Vehicles of a KKR Credit Fund or Other Client. In certain instances, KKR Credit will have little influence over certain unaffiliated Platform Managers and Asset Servicers invested in by a KKR Credit Fund or Other Client, and there is no assurance that these investments will benefit such KKR Credit Fund or Other Client, either economically or by achieving access to attractive future investment opportunities. Any compensation paid to Platform Managers or Asset Servicers, including Platform Managers and Asset Servicers that are KKR affiliates and including personnel that are former KKR Credit personnel, Senior Advisors, Industry Advisors, KKR Capstone executives or RPM, will increase the costs of and reduce the KKR Credit Fund’s or Other Client’s returns from the relevant portfolio investments and will not offset carried interest or management fees or any other compensation paid by the KKR Credit Fund or Other Client to the KKR Credit GP. Please see the “Expenses” and “Other” sections below and Item 8 - “Operating Partners and Joint Venture Partners” for further information regarding the payment of fees, other compensation, and expense reimbursement to KKR Capstone, RPM, and other Consultants.
Loan Servicing and Administrative Services
Affiliates of KKR Credit also engage in loan servicing and other administrative services provided to borrowers, loan syndicates and similar arrangements. One or more of such KKR Credit affiliates are generally entitled to provide these services to portfolio companies of KKR Credit Funds and Other Clients and/or to lenders to such portfolio companies and receives or will receive fees in connection with such services. Generally, any such loan servicing or administration or similar fees received by KKR Credit or its affiliates from or with respect to a KKR Credit Fund’s or Other Client’s portfolio companies will not be shared with the KKR Credit Fund or Other Client or offset against management fees or carried interest distributions payable by such KKR Credit Fund or Other Client. KKR Credit and its affiliates also receive payments for local administration or management services related to portfolio companies or investments of KKR Credit Funds and Other Clients from those portfolio companies or from entities through which a KKR Credit Fund or Other Client invests in a portfolio company or other investment. The amount and timing of the payment of such amounts will be determined by the relevant legal, tax or regulatory treatment that a KKR Credit Fund or Other Client is seeking to achieve, having regard to the circumstances in which such amounts are paid and the jurisdiction of establishment of the relevant portfolio company or intermediary entity. Generally, any such service costs received by KKR Credit and its affiliates with respect to a KKR Credit Fund or Other Client will not be shared with the KKR Credit Fund or Other Client or offset against management fees or carried interest distributions payable by such KKR Credit Fund or Other Client.

In certain circumstances, KKR Credit will also utilize and provide [administrative and tax?] services to a foreign holding structure which could also result in compensation payable to KKR Credit or its affiliates. For example, certain KKR Credit Funds utilize a Singapore holding structure for investments in Asia. Fees earned by such KKR Credit affiliate will accrue entirely to the benefit of its KKR Credit -affiliated equity owners, which will not include KKR Credit Funds or Other Clients. Moreover, the remuneration will not offset management fees or carried interest distributions due from KKR Credit Funds or Other Clients.

Warehoused Investments
KKR Credit Funds or Other Clients have and will acquire one or more portfolio investments acquired by KKR Credit or its affiliates prior to the first closing date of such KKR Credit Fund or Other Client. KKR Credit or its affiliates receive certain fees, including fees paid to Affiliated Brokers, in connection with any such investments. KKR Capstone fees and RPM fees or other Consultants are also paid with respect to such investments. Any fees received by KKR or its affiliates with respect to such investments prior to the date of transfer of such warehoused investments to the relevant KKR Credit Fund or Other Client will generally be retained by KKR Credit or its affiliates and will not be shared with the KKR Credit Fund or Other Client or otherwise reduce management fees payable by the KKR Credit Fund or Other Client to KKR Credit. The decision of the relevant KKR Credit GP or KKR Credit regarding the timing of the first closing date of the KKR Credit Fund or Other Client could therefore generally affect the portion of fees received by KKR Credit and its affiliates with respect to the warehoused investments that are shared with the KKR Credit Fund or Other Client and that otherwise reduce management fees payable by the KKR Credit Fund or Other Client to KKR Credit. In addition, the KKR Credit Fund or Other Client will generally pay an additional amount on the acquisition cost of any warehoused investment equal to a certain percentage per annum from the date of closing of such warehoused investment until the date of transfer of such warehoused investment to the KKR Credit Fund or Other Client. The decision of the KKR Credit GP or KKR Credit regarding the timing of the transfer of the warehoused investment to the KKR Credit Fund or Other Client will therefore affect the quantum of the foregoing additional amount that is paid by the KKR Credit Fund or Other Client to KKR Credit or its affiliates.
Senior Advisors, Industry Advisors and Other Consultants
Senior advisors (“Senior Advisors”) and industry advisors (“Industry Advisors”) are typically senior business leaders who provide advisory and consulting services to KKR, KKR Credit, investment funds managed by KKR and its affiliates, KKR Credit Funds, Other Clients and portfolio companies of the foregoing. Senior Advisors and Industry Advisors are engaged as consultants rather than employees of KKR or KKR Credit and are compensated for services provided in relation to KKR, KKR Credit, investment funds managed by KKR and its affiliates, KKR Credit Funds, Other Clients and such portfolio companies. A significant portion of the compensation and reimbursement of expenses paid to Senior Advisors, Industry Advisors and other Consultants are allocated to investment funds managed by KKR and its affiliates, KKR Credit Funds or Other Clients as expenses, and as a result, these items are described in detail below under Expenses – Senior Advisors and Industry Advisors. Senior Advisors, Industry Advisors and other Consultants also receive compensation and expense reimbursement for providing services to portfolio companies, which includes compensation for services on boards of directors, compensation for service as interim executives and consulting related compensation, which involves both fixed and incentive compensation. Accordingly, KKR Credit Funds and Other Clients indirectly bear the cost of such compensation and expense reimbursement. Compensation and expense reimbursement received by Senior Advisors and Industry Advisors do not offset management fees payable by KKR Credit Funds or Other Clients.

Please see the “Expenses” section below for further information regarding allocation to KKR Credit Funds or Other Clients of compensation and other payments received by Senior Advisors and Industry Advisors.

KKR Advisors KKR advisors (“KKR Advisors”) are individuals who were formerly employees of KKR and are subsequently engaged as consultants for KKR or its affiliates. Compensation of KKR Advisors is not borne by KKR Credit Funds or Other Clients. However, KKR Advisors serve on the boards of portfolio companies of KKR Credit Funds or Other Clients and any fees paid to KKR Advisors by portfolio companies, such as director or consulting fees, will not be shared with or credited against any management fees payable by KKR Credit Funds or Other Clients. Former KKR or KKR Credit employees have and could also join a portfolio company (including a joint venture between a KKR Credit Fund or Oher Client and a third party manager or other persons) as full time employees of such portfolio company and any compensation received by such former employees will not offset management fees payable by the applicable KKR Credit Fund or Other Client.
Expenses
Three general categories of expenses are allocated to and among KKR Credit Funds or Other Clients, KKR Credit Associates Vehicles, co-investment vehicles as further detailed in “Allocation of Investments” section below and certain KKR proprietary entities. These categories are discussed below under: (1) fund organizational and administrative expenses; (2) sourcing and diligence expenses; and (3) oversight expenses. The offering and governing documents of each KKR Credit Fund or Other Client contain more detailed information on the type of expenses that will be charged to such KKR Credit Fund or Other Client.

In addition to calling capital to pay expenses, KKR Credit (or an affiliate) from time to time advances funds on behalf of KKR Credit Funds or Other Clients for the payment of expenses and then be reimbursed through a reduction of subsequent distributions by the relevant KKR Credit Fund or Other Client (or subsidiary of a KKR Credit Fund or Other Client) or by reducing the amount of monitoring fees, transaction fees and break-up fees allocable to such KKR Credit Fund or Other Client that would otherwise reduce management fees. When a portfolio company bears an expense directly, each direct and indirect equity owner of such company will indirectly bear a portion of such expenses. Expenses are also reimbursed to KKR Credit by portfolio companies, with the same effect. However, expenses are also be borne by (i) holding companies or other vehicles through which certain, but not all, of the direct and indirect equity owners of the portfolio company invest or (ii) a specific KKR Credit Fund or Other Client. When such expenses are borne by such holding companies or other vehicles or by a specific KKR Credit Fund or Other Client, such KKR Credit Fund or Other Client will bear a greater portion of such expenses than would be the case if the relevant portfolio company paid such expenses as only the investors in the holding company (or KKR Credit Fund or Other Client) will bear the cost of such expenses. Fund Organizational and Administrative Expenses These expenses are related to the organization, operation and administration of KKR Credit Funds or Other Clients and are not directly related to sourcing investments or to any particular portfolio company. These include expenses related to activities, operations, meetings, and the eventual termination and liquidation of KKR Credit Funds or Other Clients. Examples of organizational expenses are legal, accounting, and filing expenses incurred in connection with the organization and establishment of any KKR Credit Fund and the related KKR Credit GP, and the marketing and offering of interests in such KKR Credit Fund or Other Client, including commissions, costs, fees, and expenses of any placement agent or finder and legal, accounting, filing, capital raising, travel (including first or business class airfare and black car service) and accommodation (including first class lodging), printing and other similar costs, fees, and expenses. Certain KKR Credit Funds or Other Clients have and could pay the cost of the fund administration services KKR Credit employees provide (including compensation otherwise payable by KKR Credit), and/or internal costs (including compensation and overhead costs) attributable to certain Consultants. Such services typically consist of services that would otherwise be provided by a third-party whose fees, costs, and expenses would be paid by the KKR Credit Fund or Other Client.

Investors in KKR Credit Funds (other than KKR Credit Associates Vehicles, which do not bear management fees) or Other Clients will receive a reduction in management fees in respect of offering and organizational expenses in excess of specific amounts as described in the offering materials, disclosure documents and/or governing documents of the relevant KKR Credit Fund or Other Client. KKR Credit or one or more of its affiliates will generally bear the allocable share of organizational costs and other expenses attributable to KKR Credit Associates Vehicles without seeking reimbursement from such vehicles. In addition, organizational expenses of a feeder fund (other than a KKR Credit Associates Vehicle) investing in any KKR Credit Fund have and could be borne by such KKR Credit Fund or such feeder funds, as specified in the offering materials, disclosure documents and/or governing documents of the relevant KKR Credit Fund.

Examples of direct and indirect operational expenses that fall within this category are professional fees directly attributable to a specific KKR Credit Fund or Other Client, such as legal fees and audit fees; insurance premiums and; fund borrowings; indemnification obligations; expenses relating to legal and regulatory compliance; fees, costs and expenses relating to the administration of any fund and its assets, including without limitation those incurred in connection with the preparation of financial statements, tax returns, K-1s, administration of assets, financial planning and treasury activities; fees, costs and expenses incurred in the preparation of and providing access to fund reports and information (including through websites or other portals) and related operational, secretarial or postage expenses (including technology and other administrative support); general and administrative costs (including salary, bonus, benefits and an allocated portion of overhead of certain Employees); compensation and expenses of Senior Advisors and Industry Advisors; fees, other compensation and expenses of KKR Capstone, RPM and other Consultants; principal, interest on and fees and expenses arising out of, all fund borrowings; the costs of advisory committee meetings and the annual investors conference (or other investor meetings) and portfolio management committee meetings for the relevant KKR Credit Fund or Other Client (including costs and expenses of meals, events, entertainment and travel and accommodation costs of KKR Credit personnel, Senior Advisors, Industry Advisors, KKR Advisors and employees of other Consultants attending such meetings); fees, costs and expenses incurred in connection with any amendments, restatements or other modifications to, or the monitoring of compliance with, fund agreements, side letters (including “most favored nations” provisions) and other constituent or related documents of the relevant KKR Credit Fund or Other Client or KKR Credit GP (including costs and expenses relating to investor and advisory committee consent, please register to get more info

As noted in Item 5 - Fees and Compensation above, KKR Credit (including the KKR Credit GPs) generally receives carried interest allocations and fees from KKR Credit Funds or Other Clients. From time to time, KKR Credit has an incentive to favor, or take increased investment risk with respect to KKR Credit Funds or Other Clients from which it receives higher carried interest allocation (or which are subject to lower preferred return hurdles) or fees over KKR Credit Funds or Other Clients from which lower or no carried interest allocation or fees is received (and notwithstanding that such accounts do not give rise to carried interest allocations, KKR Credit in any event will in certain cases have an incentive to favor a certain KKR proprietary entity over any other KKR Credit Fund or Other Client). KKR Credit has in place policies and procedures to address these conflicts, including policies and procedures designed to ensure allocation of investment opportunities among all client and KKR proprietary entities on a fair and equitable basis, taking into account the client’s investment objectives. These policies and procedures are described in more detail below in Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading. KKR Credit advises certain KKR Credit Funds that are either feeder funds investing in other KKR Credit Funds or side-by-side vehicles investing alongside other KKR Credit Funds established primarily for the benefit of Employees, Senior Advisors, Industry Advisors and KKR Advisors and RPM and certain other persons associated with KKR and KKR Credit (including, without limitation, executives of KKR and KKR Credit portfolio companies, external consultants, service providers and their affiliated entities) (“KKR Credit Associates Vehicles”). KKR Credit Associates Vehicles are not subject to management fees or carried interest allocations but are generally allocated monitoring fees, transaction fees, break-up fees and other similar fees based on their respective ownership (including indirect ownership through KKR Credit Funds) of the portfolio company or investment as discussed above in Item 5 - Fees and Compensation (except in the case of investments made alongside certain older KKR Credit Funds). KKR Credit or its affiliates retains such compensation to the extent it is allocable to KKR Credit Associates Vehicles (except in the case of investments made alongside certain older investment funds managed by KKR and its affiliates). KKR Credit or its affiliates bears allocable share of KKR Credit Fund organizational costs and other expenses on behalf of the KKR Credit Associates Vehicles. As the investment activities of these vehicles are implemented indirectly through the other KKR Credit Funds in which they invest or alongside other KKR Credit Funds, as applicable, KKR Credit does not view these arrangements as giving rise to the types of conflicts of interest described above. please register to get more info

KKR Credit provides investment management, advisory and administrative services, as described above in response to Item 4 - Advisory Business, to the KKR Credit Funds and Other Clients. With limited exceptions (including, currently, with respect to KKR Credit Funds established as a RIC and KKR Credit Associates Vehicles), investment in KKR Credit Funds is generally only available to institutional investors and certain high net worth investors that are “accredited investors” and “qualified purchasers” or in the case of Employees, “knowledgeable employees”, within the meaning of the Securities Act and the Investment Company Act, as applicable. KKR Credit Funds or Other Clients, from time to time, have a specified minimum investment amount as set forth in their offering materials, disclosure documents and/or governing documents. These minimum amounts generally are subject to discretion, on the part of KKR Credit or the relevant KKR Credit GP, to permit investments of a smaller amount generally or with respect to any investor. Investment minimums and the circumstances under which they are waived are set forth in their respective offering materials, disclosure documents and/or governing documents. A broad range of U.S. and non-U.S. institutional investors, including, among others, governmental and corporate pension and profit sharing plans, endowments and foundations, insurance companies, financial institutions, sovereign wealth funds, funds of funds, private wealth and other third party distribution platforms and certain high net worth individuals and family offices, invest in KKR Credit Funds and Other Clients. Additionally, Employees and other persons associated with KKR Credit and/or its affiliates and portfolio companies, including, for example, current or former portfolio company executives, and certain KKR proprietary entities, make capital contributions to KKR Credit Funds including, in particular, KKR Credit Associates Vehicles. please register to get more info

Investment Strategies and Methods of Analysis

The investment strategies employed by KKR Credit in respect of the KKR Credit Funds or Other Clients focus, primarily, on global leveraged credit strategies, such as leveraged loan and high yield bond strategies, alternative credit strategies (including mezzanine and mezzanine-like instruments, special situations instruments, structured and illiquid credit, asset based lending and direct senior loan origination and related instruments), equity, and real assets. Certain KKR Credit Funds might also accommodate co-investments alongside investment funds managed by KKR and its affiliates including private equity funds and funds that invest in real assets. In pursuit of these strategies, KKR Credit, on behalf of KKR Credit Funds or Other Clients, from both a long or short investment perspective, will sometimes invest in a broad range of securities and/or loans and other financial instruments including: U.S. and non-U.S. debt securities and/or loans including public and privately placed corporate and government bonds and other debt securities, equity securities, hybrid securities, stock market indices, exchange traded funds, convertibles, asset backed and other structured debt securities, emerging market debt, warrants, bank loans and participations in bank loans, repurchase agreements, foreign currency and interest rate forward contracts, swap agreements (including credit default swaps), options, commodities, futures contracts on intangibles and interests in partnerships investing in oil and gas and real estate interests and other derivative or synthetic investment instruments, and joint venture equity investments.

KKR Credit employs both “top-down” and “bottom-up” analyses when making investments. KKR Credit’s top-down analysis involves a macro analysis of relative asset valuations, long-term industry trends, business cycles, interest rate expectations, credit fundamentals and technical factors to target specific industry sectors and asset classes in which to invest. KKR Credit’s bottom-up analysis includes, in the case of credit/debt strategies, a rigorous analysis of the credit fundamentals and capital structure of each credit considered for investment and a thorough review of the impact of credit and industry trends and dynamics and dislocation events on such potential investment. In implementing its special situations, private credit and mezzanine investment strategies, KKR Credit also uses internally developed proprietary industry and company- specific models as a basis for forecasting market and company specific trends. KKR Credit utilizes multiple sources of information in analyzing investments, including financial newspapers and magazines, inspections of corporate activities, research material prepared by others, corporate rating services, annual reports, prospectuses, filings with the SEC, and company press releases. KKR Credit also uses industry magazines, third party consultants, expert networks, lawyers, accountants, asset operators, regulatory filings filed with U.S. and non-U.S. regulators, its global network of contacts at major companies and corporate executives, commercial and investment banks, financial intermediaries, other investment and advisory institutions and its direct and indirect contacts through its affiliation with KKR. KKR Credit employees also participate in on-site visits, industry group and portfolio company management meetings, creditors’ committees, steering committees or on the boards of directors of portfolio companies, which will also be a source of information in respect of such companies subject to policies and procedures related to nonpublic and proprietary information. In addition, KKR Capstone, RPM, other Consultants, Senior Advisors, Industry Advisors and KKR Advisors often provide supplemental insights to KKR and KKR Credit from a management consulting perspective and from the perspective of a C-level executive (i.e., “chief” executive officers or other senior officers) or board of directors. KKR has a roster of active Senior Advisors and Industry Advisors globally, many of whom have extensive corporate management expertise, having served as Chief Executive Officer, Chief Financial Officer, Chairman of the Board, or other comparable positions at large, industry-leading companies or governmental regulatory agencies. In conducting due diligence on investments in third party funds, KKR Credit will use many of the above due diligence methods, as appropriate, in addition to a detailed review of fund governing documents in conjunction with external counsel and consultants.

Material Risks of Significant Investment Strategies
The risk factors briefly summarized below are not applicable to all KKR Credit Funds or Other Clients. Such summary does not purport to be a complete list or explanation of the risks involved in an investment in a KKR Credit Fund or Other Client. The offering materials, disclosure documents and/or governing documents of each KKR Credit Fund or Other Client will typically include a more detailed summary of material risks applicable to the KKR Credit Fund or Other Client and its investment strategy and structure and should be read in conjunction with the risks below.

Illiquid and Long-Term Investments

Investments in KKR Credit Funds or Other Clients are speculative in nature and require a long-term commitment, with no certainty of return of capital or gains. The investments are expected to be predominantly illiquid and there can be no assurance that a KKR Credit Fund or Other Client will be able to generate returns for investors. The realizable value of a highly illiquid investment is often less than its intrinsic value. Although certain investments by KKR Credit Funds and Other Clients generate current income, the return of capital and the realization of gains, if any, from an investment generally will occur only upon the partial or complete disposition of such investment, as to which there can be no certainty. While investments of KKR Credit Funds and Other Clients can generally be sold at any time, sales typically only occur only a number of years after the investment is made. KKR Credit Funds and Other Clients will generally not be able to sell securities and/or loans comprising an investment publicly unless their sale is registered under applicable securities laws, or unless an exemption from such registration requirements is available. In addition, in some cases, a KKR Credit Fund or Other Client will be prohibited by contract from selling certain securities and/or loans for a period of time, which will restrict their ability to be able to exit the relevant investment and sometimes means that the KKR Credit Fund or Other Client is unable to take advantage of favorable market prices when doing so. Furthermore, such illiquidity sometimes continues even if the underlying portfolio companies or other relevant issuers obtain listings on securities exchanges. There can be no assurance that a KKR Credit Fund or Other Client will be able to dispose of its investments at the price and at the time it wishes to do so, and investors should expect that they will likely not receive a return of their capital for a long period of time even if the investments of the KKR Credit Fund or Other Client in which they are invested prove successful. Certain investments by KKR Credit Funds or Other Clients are in securities that are or become publicly traded. Such investments are subject to economic, political, interest rate and other risks, any of which could result in an adverse change in the market price. Valuation Risk KKR Credit Funds and Other Clients will rely on the relevant KKR Credit GP or KKR Credit and its affiliates, as applicable, for valuation of their assets and liabilities. KKR Credit Funds and Other Clients will primarily hold securities and/or loans and other assets that will not have readily ascertainable market values. In such instances, the relevant KKR Credit GP or KKR Credit will determine the fair value of such securities and/or loans and assets in its reasonable judgment based on various factors and in reliance on internal pricing models, in accordance with KKR Credit’s valuation policies and procedures. KKR Credit makes use of, and relies on, valuation information and data developed and provided by certain third parties. Such valuations sometimes vary from similar valuations performed by other independent third parties for similar types of securities or assets. In addition, KKR Credit Funds and Other Clients rely on the valuations or valuation information provided by, or determined in consultation with, the relevant KKR general partner or KKR and its affiliates, as applicable (for example, when KKR Credit Funds or Other Clients are investing in KKR investment strategies). The valuation of illiquid securities and other assets is inherently subjective and subject to increased risk that the information utilized to value such assets or to create the price models could be inaccurate or subject to other error. The value of a KKR Credit Fund or Other Client’s portfolio is sometimes also be affected by changes in accounting standards, policies or practices as well as general economic, political, regulatory and market conditions and the actual operations of portfolio investments which are not predictable and can have a material impact on the reliability and accuracy of such valuations. Due to a wide variety of market factors and the nature of certain securities and/or loans and assets to be held by KKR Credit Funds and Other Clients, there is no guarantee that the value determined by a KKR Credit GP or KKR Credit will represent the value that will be realized by a KKR Credit Fund or Other Client on the eventual disposition of an investment or that would, in fact, be realized upon an immediate disposition of the investment. KKR Credit regularly reports to investors and prospective investors certain metrics of KKR Credit Funds and Other Clients performance, such as rates of return and multiples of money, which calculations depend on the value of such KKR Credit Funds or Other Clients investments, including unrealized investments, and involves uncertainties and subjective determinations, including for difficult to value assets. The amount and timing of carried interest received by KKR Credit or a KKR Credit GP with respect to a KKR Credit Fund or Other Client will depend in part on the value of a KKR Credit Fund’s or Other Client’s assets and liabilities. If the valuations made by the KKR Credit GP or KKR Credit are incorrect, the amount of carried interest received by the KKR Credit GP or KKR Credit or the timing of receipt of carried interest would also be expected to be incorrect. Due Diligence

KKR Credit seeks to conduct reasonable and appropriate analysis and due diligence of its investments based on the facts and circumstances applicable to each investment. The objective of such analysis and due diligence is to identify attractive investment opportunities based on the facts and circumstances surrounding an investment, to identify possible risks associated with that investment. Due diligence generally entails evaluation of important and complex business, financial, tax, accounting, environmental, social and governance issues, technological, regulatory and legal issues. Consultants, legal advisors, accountants, investment banks and other third parties are generally involved in the due diligence process to varying degrees depending on the type of investment. Involvement of third party advisors or consultants present a number of risks primarily relating to KKR Credit’s reduced control of the functions that are outsourced. In addition, if KKR Credit is unable to timely engage third-party providers, their ability to evaluate and acquire more complex targets could be adversely affected. When conducting due diligence and making an assessment regarding a public markets investment, KKR Credit relies primarily on publicly available information and resources. In connection with certain alternative credit strategies, KKR Credit also relies on information provided by the target of the investment and, in some circumstances, third-party information. The due diligence that KKR Credit carries out with respect to any investment opportunity will not always reveal or highlight all relevant facts that that are necessary or helpful in evaluating such investment opportunity. In addition, instances of fraud and other deceptive practices committed by the management teams of portfolio companies in which a KKR Credit Fund or Other Client has an investment could undermine KKR Credit’s due diligence efforts with respect to such companies. Moreover, such an investigation will not necessarily result in the investment being successful. Conduct occurring at portfolio companies, even activities that occurred prior to a KKR Credit Fund or Other Client investment therein, could have an adverse impact on a KKR Credit Fund or Other Client. Additionally, in connection with the evaluation of potential investment opportunities, KKR Credit engages with individuals retained by expert networks who are under an obligation not to disclose confidential information. KKR Credit seeks to avoid inadvertently obtaining confidential information from such sources and has therefore implemented procedures to mitigate the risk that the use of expert networks could result in the receipt of confidential information by investment professionals. However, no assurance can be made that such individuals do not share confidential information. In such cases, KKR Credit could become restricted from pursuing investments, which could adversely impact on a KKR Credit Fund or Other Client.

As a part of due diligence on a potential investment, KKR Credit sometimes invest in the securities or interests of a portfolio company on the basis of the company’s financial projections. Management judgments are generally the basis for projected operating results. Projections are merely estimates of future results based on assumptions made when the projections were developed. There is no certainty that a company will achieve its projected results, and actual results can vary significantly from projections. Unpredictable general economic conditions can have a material adverse impact on the reliability of such projections and the performance of an investment.

Instances of bribery, fraud, accounting irregularities and other improper, illegal or corrupt practices can be difficult to detect, and fraud and other deceptive practices can be widespread in certain jurisdictions. Several KKR Credit Funds or Other Clients invest in emerging market countries that do not have established laws and regulations that are as stringent as in more developed nations, or where there exists insufficient coordination of anti-corruption initiatives and/or other existing laws and regulations are not consistently enforced. For example, KKR Credit Funds invest throughout jurisdictions that have material perceptions of corruption according to international rating standards (such as “Transparency International” and “Corruption Perceptions Index”) such as China, India, Indonesia, and countries in Central and South America, the Middle East and Africa. Due diligence on investment opportunities in these jurisdictions is frequently more complicated because consistent and uniform commercial practices in such locations have not developed. Bribery, fraud, accounting irregularities and corrupt practices can be especially difficult to detect in such locations. Accordingly, KKR Credit cannot be certain that the due diligence investigation that it will carry out with respect to any investment opportunity will reveal or highlight all relevant facts (including fraud, bribery and other illegal activities and contingent liabilities) that are necessary or helpful in evaluating such investment opportunity, including the existence of contingent liabilities. KKR Credit also cannot be certain that its due diligence investigations will result in investments being successful or that the actual financial performance of an investment will not fall short of the financial projections KKR Credit used when evaluating that investment. Additionally, in connection with the evaluation of potential investment opportunities, KKR Credit may engage with individuals retained by certain expert networks, consultants or research firms who are under an obligation not to disclose proprietary and/or confidential information. KKR Credit seeks to avoid inadvertently obtaining proprietary and/or confidential information from such sources and has therefore implemented policies, procedures and processes to mitigate this risk. However, no assurance can be made that consultants of expert networks, consultancy firms or research providers do not share proprietary and/or confidential information. In such cases, KKR Credit will become restricted from pursuing an investment opportunity, which could adversely impact a KKR Credit Fund or Other Client. Risks Arising from Provision of Oversight Rights KKR Credit Funds or Other Clients sometimes seek or obtain oversight rights with respect to KKR Credit Funds’ or Other Clients’ portfolio companies, and KKR, KKR Credit or KKR Capstone executives and/or Senior Advisors often will serve on the boards of directors of portfolio companies. The designation of directors and other types of participation could expose the assets of a KKR Credit Fund or Other Client to liability for environmental damage, product defects, pension and other fringe benefits, failure to supervise management, violation of laws and government regulations (including securities laws) and other types of liability, as well as claims by a portfolio company, its security holders and creditors, governmental authorities and other third parties which could exceed the value of a KKR Credit Fund’s or Other Client’s initial investment in that portfolio company. Regulators and courts in some jurisdictions could find a basis for attributing liability to a KKR Credit Fund or Other Client even where the nexus between the KKR Credit Fund or Other Client and the activities at the portfolio company that led to the liability being incurred in the first place are attenuated. While KKR Credit GPs intend to reduce exposure to these risks to the extent practicable, the possibility of successful claims cannot be precluded. From time to time, KKR employees and affiliates serve on the board of directors of one or more KKR Credit Fund or Other Client portfolio company and other issuers in which it invests. Serving in such capacity could give rise to conflicts to the extent that an employee’s fiduciary duties to an issuer as a director conflict with the interests of KKR Credit Funds or Other Clients.

In addition, the provision of managerial assistance to a portfolio company could result in KKR Credit Funds or Other Clients being characterized as “a trade or business” for purposes of ERISA controlled group liability, and, in the event that KKR Credit Funds or Other Clients have a significant ownership interest (generally 80% or more) in such portfolio company, there is a potential risk that KKR Credit Funds or Other Clients and such portfolio company could be subject to controlled group liability under ERISA. As a result, such portfolio companies and KKR Credit Funds or Other Clients could be held jointly responsible for certain employee benefit obligations or liabilities under ERISA, including funding obligations to single- employer pension plans and withdrawal liability from union-sponsored multi-employer pension plans, particularly if the ownership interests of parallel funds and/or related funds or vehicles are required to be aggregated when applying the controlled group ownership tests. Recent legal developments relating to the controlled group ownership tests, notably Sun Capital Partners v. New England Teamsters and Trucking Industry Pension Fund, indicate that there is an increased risk that courts could conclude that controlled groups exist with respect to such structures. Complex Investments KKR Credit often pursues complex investment opportunities. This can often take the form of substantial business, regulatory or legal complexity that might deter other investment managers. KKR Credit’s tolerance for complexity presents risks, as such transactions can be more difficult, expensive and time consuming to finance and execute; it can be more difficult to manage or realize value from the assets acquired in such transactions; and such transactions sometimes entail a higher level of regulatory scrutiny, the application of complex tax laws or a greater risk of contingent liabilities. KKR Credit Fund (and potentially Other Client) transactions involve complex tax structures that are costly to establish, monitor and maintain, and as KKR Credit pursues a larger number of transactions across multiple assets classes and in multiple jurisdictions, such costs will increase and the risk that a tax matter is overlooked or inadequately or inconsistently addressed will increase. Consequently, KKR Credit is subject to the risk of failing to achieve the desired tax benefit or otherwise decrease the returns of KKR Credit Fund and Other Client investments. Changes in law and regulation and in the enforcement of existing law and regulation, such as antitrust laws, data privacy and data protection laws and tax laws, also add complexity and risk to KKR Credit’s investment strategies. Further, there is a risk that KKR Credit Funds or Other Clients will acquire an investment that is subject to contingent liabilities, which could be unknown to KKR at the time of acquisition or, if they are known to KKR Credit, KKR Credit will not accurately assess or protect against the risks that they present. Acquired contingent liabilities could thus result in unforeseen losses for KKR Credit Funds or Other Clients. Investment Ranking In many cases, the portfolio companies in which a KKR Credit Fund or Other Client invests have, or are permitted to have, outstanding indebtedness or equity securities that rank senior to such investments. By their terms, such instruments generally provide that their holders are entitled to receive payments of distributions, interest or principal on or before the dates on which payments are to be made in respect of such investments. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a company in which an investment is made, holders of securities ranking senior to a KKR Credit Fund’s or Other Client’s investment would typically be entitled to receive payment in full before distributions could be made in respect of their investment. Dividends and distributions paid to KKR Credit Funds or Other Clients, as well as fees such as transaction fees and monitoring fees which could be creditable in whole or in part, depending on the applicable terms of the relevant KKR Credit Funds or Other Clients, against management fees payable by KKR Credit Funds or Other Clients, are potentially subject to clawback under various legal theories in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy. In addition, debt investments made by KKR Credit Funds or Other Clients in portfolio companies could be equitably subordinated to the debt investments made by third parties in such portfolio companies. After repaying senior security holders, such companies might not have any remaining assets to use for repaying amounts owed in respect of such investments. To the extent that any assets remain, holders of claims that rank equally with a KKR Credit Fund or Other Client investment would be entitled to share on an equal and ratable basis in distributions that are made out of those assets. Also, during periods of financial distress or following insolvency, the ability of a KKR Credit Fund or Other Client to influence a company’s affairs and to take actions to protect an investment might be substantially less than that of the senior creditors. Investments Longer Than Fund Term KKR Credit Funds and Other Clients will generally be terminated and dissolved in accordance with the provisions set forth in their governing documents, including any permissible extensions of the terms of the relevant KKR Credit Fund or Other Client. KKR Credit Funds and Other Clients might make investments that are not advantageously disposed of prior to the date that a KKR Credit Fund will be dissolved or an Other Client relationship will terminate, as applicable, either by expiration of the term or otherwise pursuant to their governing documents.

Limited Number of Investments

KKR Credit Funds and Other Clients are permitted to participate in a relatively limited number of investments and, as a consequence, the aggregate return of a KKR Credit Fund or Other Client could be substantially adversely affected by the unfavorable performance of even a single investment. In addition, KKR Credit Funds or Other Clients’ investment programs are often concentrated in a limited number of sectors and geographies. During periods of difficult market conditions or slowdowns in certain regions or geographies, the adverse effect on a KKR Credit Fund or Other Client could be exacerbated by the geographic or sectoral concentration of its investments. If a KKR Credit Fund or Other Client is unable to sell, assign or otherwise syndicate out loan, bond or other positions that it holds that are greater than the KKR Credit Fund’s or Other Client’s target positions, such KKR Credit Fund or Other Client will be forced to hold its excess interest in such investments for an indeterminate period of time. This could result in a KKR Credit Fund or Other Client’s investments being over-concentrated in certain borrowers. To the extent that a KKR Credit Fund or Other Client concentrates investments in a particular borrower, investment, sector or geographic region, its investments will become more susceptible to fluctuations in value resulting from adverse economic or business conditions with respect thereto. In addition, to the extent an investor in a KKR Credit Fund or Other Client is also an investor in one or more other KKR Credit Funds or Other Clients that co-invest alongside each other in a particular investment, such investor’s exposure to and risk of loss with respect to such investment will be further concentrated. Investment Leverage; Availability of Financing KKR Credit Fund and Other Client investments typically include investments in companies and assets whose capital structures include significant indebtedness (including to the extent KKR Credit Funds or Other Clients hold second-lien debt interests, certain leverage senior to KKR Credit Funds’ or Other Clients’ investment). Such investments are inherently more sensitive to declines in revenues, competitive pressures and increases in expenses and interest rates. A highly leveraged entity or asset often will be subject to restrictive covenants in its lending agreement restricting its activity, or could be limited in making strategic acquisitions, or obtaining additional financing, and will have increased exposure to adverse economic factors such as downturns in the economy or deterioration in the condition of the portfolio company or its industry. To the extent KKR Credit Funds or Other Clients hold second lien or other subordinated debt interests therein, such companies or assets could be subject to restrictive financial and operating covenants in more senior debt instruments and contracts that adversely impact KKR Credit Funds’ or Other Clients’ investments. In addition, leveraged entities or assets could be subject to restrictions on making interest payments and other distributions. If an event occurs that prohibits a portfolio company or other portfolio investment from making distributions for a particular period, this could affect the levels and timing of any returns of a KKR Credit Fund or Other Client. This leverage could result in more serious adverse consequences to such companies or assets (including their overall profitability or solvency) in the event these factors or events occur than would be the case for less leveraged investments. If a highly leveraged company or asset cannot generate adequate cash flow to meet debt obligations, it could default on its loan agreements or bonds or be forced into bankruptcy resulting in a restructuring of its capital structure or liquidation. Furthermore, to the extent companies or assets in which KKR Credit Funds or Other Clients have invested become insolvent, KKR Credit Funds or Other Clients might determine, in cooperation with other debt holders or on their own, to engage, at the KKR Credit Funds’ and Other Clients’ expense in whole or in part, counsel and other advisors in connection therewith. In addition to leverage in the capital structure of companies and other assets, KKR Credit could incur leverage on behalf of KKR Credit Funds or Other Clients Because KKR Credit Funds and Other Clients typically make equity investments in portfolio companies, the equity securities received by KKR Credit Funds and Other Clients will typically be the most junior or some of the most junior securities in the case of a levered capital structure, and thus subject to the greatest risk of loss in the case of the portfolio company’s financial difficulty, or if an event of default occurs under the terms of the relevant financing and a lender decides to enforce its creditor rights. Events of default could in some cases be triggered by events not related directly to the borrower itself. A KKR Credit Fund or Other Client’s ability to achieve attractive rates of return in many cases will depend on the availability and terms of any borrowings that are required or desirable with respect to its investment strategy. For example, from time to time the market for private equity transactions has been adversely affected by a decrease in the availability of senior or subordinated financings for transactions. A decrease in the availability of financing or an increase in either interest rates or risk spreads demanded by financing sources, whether due to changes in economic or financial market conditions or a decreased appetite for risk by lenders, could also make it more expensive to finance investments by KKR Credit Funds or Other Clients on acquisition and throughout the term of their investment and could make it more difficult to compete for new investments with other potential buyers that have a lower cost of capital. A portion of the indebtedness used to finance investments on acquisition and throughout the term of a KKR Credit Fund’s or Other Client’s investment often includes high-yield debt securities issued in the capital markets. Availability of capital from the high-yield debt markets is subject to significant volatility, and there are times when a KKR Credit Fund or Other Client will not be able to access those markets at attractive rates, or at all, when completing an investment or as otherwise required during the term of the KKR Credit Fund’s or Other Client’s investment. Leverage is also applied with respect to a KKR Credit Fund’s or Other Client’s portfolio in entirety or with respect to one or more investments, and the presence of such borrowings will magnify the volatility of such KKR Credit Fund’s or Other Client’s investment portfolio and could substantially increase the risk profile of a KKR Credit Fund or Other Client and its investments.

Any failure by lenders to provide previously committed financing can also expose KKR Credit Funds or Other Clients to potential claims by sellers of businesses which KKR Credit Funds or Other Clients have contracted to purchase. When existing portfolio companies reach the point when debt incurred to finance those investments matures in significant amounts and must be either repaid or refinanced, those investments would likely materially suffer if they have generated insufficient cash flow to repay maturing debt and there is insufficient capacity and availability in the financing markets to permit them to refinance maturing debt on satisfactory terms, or at all. If the financing for such purposes were to be unavailable or uneconomic when significant amounts of the debt incurred to finance existing portfolio investments start to come due, these investments could be materially and adversely affected. In the event of default or potential default under applicable financing arrangements, one or more portfolio companies could go bankrupt, which could give rise to substantial investment losses, adverse claims or litigation against KKR Credit or KKR Credit Funds or Other Clients. In addition, the leveraged lending guidelines published by U.S. federal bank regulatory agencies and the European Central Bank (“ECB”) (or similar guidelines or restrictions published or enacted in the future) could limit the willingness or ability of banks or other financing sources to provide financing sought by KKR Credit Funds or Other Clients or their portfolio companies, and could result in an inability of a KKR Credit Fund or Other Client or their portfolio companies to establish their desired financing or capital structure. Please see “Subscription Facilities; Guarantees; Contractual Obligations” below for further information. Availability of Suitable Investment Opportunities The success of a KKR Credit Fund’s or Other Client’s investment strategy depends on the ability of KKR Credit to identify and select appropriate investment opportunities and to acquire these investments. The industries and sectors in which a KKR Credit Fund or Other Client invests are highly competitive. KKR Credit Funds and Other Clients compete for investments with operating companies, financial institutions, and other institutional investors as well as private equity, hedge, and other investment funds, and this competition could adversely impact the availability of investments and the terms upon which KKR Credit effects and exits them. International Investments KKR Credit Funds and Other Clients invest globally and in could invest in emerging or developing market countries (including in Asia, Central and South America, Eastern Europe, countries in the Middle East, including Israel, and Africa). Investments in emerging and developing markets, as well as in certain more developed non-U.S. markets, involve certain factors not typically associated with investing in more developed countries and economies, including, without limitation, risks relating to: (i) differences between the U.S. and non-U.S. debt markets, including potential price volatility in, and relative illiquidity of, some non-U.S. markets; (ii) the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements; (iii) less government supervision and regulation in some countries, which could result in lower-quality information being available and less developed corporate laws regarding fiduciary duties and the protection of investors, less developed bankruptcy laws and difficulty in bringing suit and enforcing contractual obligations; (iv) certain economic and political risks, including potential economic, political or social instability, exchange control regulations, restrictions on non-U.S. investment and repatriation of capital (possibly requiring government approval), expropriation or confiscatory taxation and higher rates of inflation and reliance on a more limited number of commodity inputs, service providers and/or distribution mechanisms; (v) unpredictable governmental influence on the national and local economies including the risk of nationalization of key industries or changes in a country’s policies on privatizations; (vi) fewer or less attractive financing and structuring alternatives and exit strategies; (vii) the possible imposition of local taxes on income and gains recognized with respect to investments; (viii) increased currency, interest rate and credit risks; and (ix) different corporate governance frameworks. In addition, various countries and regulatory bodies from time to time implement controls on foreign exchange and outbound remittances of currency, which could impact not only the timing and amount of capital contributions that are required to be made to KKR Credit Funds and Other Clients but also the value, in U.S. dollars, of the investments and investment proceeds of KKR Credit Funds and Other Clients. For example, China has implemented stricter controls on foreign exchange and outbound remittances. The risks of investing in emerging and developing markets, including the risks described above, are usually greater than the risks involved in investing in more developed markets and also increase counterparty risks for investments in those markets. In addition, investor risk aversion to developing or emerging markets can have a significant adverse effect on the value and/or liquidity of investments made in or exposed to such markets and can accentuate any downward movement in the actual or anticipated value of such investments which is caused by the factors described above.

Following the global financial crisis of 2008-2009 and the subsequent uneven global recovery, the rise of populist political parties and economic nationalist sentiments has led to increasing political uncertainty and unpredictability throughout the world. Furthermore, the current rise of populist political movements could result in negative sentiment toward globalization, free trade, capitalism and financial institutions, which could lead to heightened scrutiny and criticisms of KKR Credit and investments of KKR Credit Funds and Other Clients. In addition, public discourse in the 2020 U.S. presidential election has elevated the level of focus put on KKR Credit and the industries and the portfolio companies in which KKR Credit Funds and Other Clients are invested. The risk of reputational harm is elevated by the prevalence of internet and social media usage and the increased public focus on behaviors and externalities of business activities, including those affecting stakeholder interests and ESG considerations. Among the attendant risks are greater regulatory uncertainty, for example regarding the posture of governments with respect to taxation, international trade, immigration and law enforcement. Further political instability or uncertainty in the future could have an adverse effect on the economy of such countries.

KKR Credit Funds or Other Clients are permitted to invest in European-based companies and companies that have operations that are or could be affected by the Eurozone economy, including, without limitation, those factors described below under “Changes Resulting from the United Kingdom’s Exit from the European Union”. The Eurozone is currently struggling with weak growth. If this growth continues to weaken then there is a possibility that the Eurozone could return to a recessionary environment and concerns that were prevalent in the years following the global financial crisis could re-emerge. Such investments are subject to the risk that certain member states of the EU could cease to use the euro as their national currency, that one or more member states, in addition to the United Kingdom, might seek to withdraw its EU membership, or even the collapse of the Eurozone as it is constituted today which would likely have an adverse impact on the European and global economy and, consequently, KKR Credit Funds and Other Clients with investments in Europe. To the extent any KKR Credit Fund’s or Other Client’s investments are denominated in the euro, legal uncertainty about the funding of euro denominated obligations following any break up of or exits from the Eurozone (particularly in the case of investments in companies in affected countries) could also have material adverse effects on a KKR Credit Fund or Other Client. EU regulations known as “MiFID II,” and “MiFIR,” regulate the provision of investment services and trading financial instruments in the EU. The application of MiFID II and MiFIR could result in increased costs to KKR Credit and its affiliates, including KKR Credit Funds and Other Clients, and any failure to comply with the new requirements, could result in enforcement action, including, but not limited to, fines. Many jurisdictions in which KKR Credit operates have laws and regulations relating to data privacy, cyber- security and protection of personal information, including the General Data Protection Regulation (“GDPR”) in the EU that became effective in May 2018 and the California Consumer Privacy Act (“CCPA”) that became effective in January 2020.

GDPR and CCPA which impose stringent privacy and data protection requirements for covered businesses and provides for significant penalties for non-compliance (see also “Cybersecurity Risks; System Failures” below). Any inability, or perceived inability, to adequately address privacy and data protection concerns, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations, even if unfounded, could result in additional cost and liability and could damage KKR Credit’s reputation and adversely affect KKR Credit Funds and Other Clients.

Economic sanction laws in the U.S. and other jurisdictions prohibit KKR Credit, KKR Credit Funds and Other Clients from transacting with certain countries, individuals and companies. In the United States, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) administers and enforces laws, Executive Orders and regulations establishing U.S. economic and trade sanctions, which prohibit, among other things, transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. These types of trade sanctions significantly restrict or completely prohibit certain investment activities in regions outside the U.S., and if a KKR Credit Fund or Other Client or its portfolio companies were to violate any such laws or regulations, it could face significant legal and monetary penalties. Accordingly, KKR Credit Funds and Other Clients will generally require its subscribers to represent and warrant, on a continuing basis, that it is not, and that to the best of its knowledge or belief its beneficial owners, controllers or authorized persons (“Related Persons”) (if any) are not; (i) named on any list of sanctioned entities or individuals maintained by OFAC or pursuant to EU and/or UK Regulations, (ii) operationally based or domiciled in a country or territory in relation to which sanctions imposed by the United Nations Security Council, OFAC, the EU and/or the UK apply, or (iii) otherwise subject to sanctions imposed by the United Nations Security Council, OFAC, the EU or the UK (collectively, a “Sanctions Subject”). Where the subscriber or a Related Person is or becomes a Sanctions Subject, the KKR Credit Fund or Other Client could be required immediately and without notice to the subscriber to cease any further dealings with the subscriber and/or the subscriber’s interest in the KKR Credit Fund or Other Client (which could include “freezing” or “blocking” such subscriber’s interest) until the subscriber ceases to be a Sanctions Subject, or a license is obtained under applicable law to continue such dealings (a “Sanctioned Persons Event”). KKR Credit Funds and Other Clients, and KKR Credit and its affiliates shall have no liability whatsoever for any liabilities, costs, expenses, damages and/or losses (including but not limited to any direct, indirect or consequential losses, loss of profit, loss of revenue, loss of reputation and all interest, penalties and legal costs and all other professional costs and expenses) incurred by the subscriber as a result of a Sanctioned Persons Event. In addition, should any investment made on behalf of a KKR Credit Fund or Other Client subsequently become subject to applicable sanctions, the KKR Credit Fund or Other Client could immediately and without notice cease any further dealings with that investment and its interest in such investment could be “frozen” or “blocked” until the applicable sanctions are lifted or a license is obtained under applicable law to continue such dealings or divest from such investment. KKR Credit and KKR Credit Funds and Other Clients are committed to comply with the U.S. Foreign Corrupt Practices Act (“FCPA”) and the FCPA and other anti-corruption laws and regulations would likely cause KKR Credit to be unwilling to enter into certain potential investments that KKR Credit spent substantial time and effort identifying and developing. The FCPA and other anti-corruption laws and regulations, as well as anti-boycott regulations, also apply to and c o u l d restrict the activities of KKR Credit Fund and Other Client portfolio companies. If a portfolio company of a KKR Credit Fund or Other Client were to violate any such laws or regulations, such portfolio company could face significant legal and monetary penalties. The U.S. government has indicated that it is focused on FCPA enforcement, which increases the risk that KKR Credit Funds’ and Other Clients’ portfolio companies or KKR Credit Funds or Other Clients become the subject of such actual or threatened enforcement. As such, a violation of the FCPA or other applicable regulations by a portfolio company could have a material adverse effect on KKR Credit Funds and Other Clients. In recent years, the U.S. Department of Justice (the “DOJ”) and the SEC have devoted greater resources to enforcement of the FCPA. In addition, the United Kingdom has recently significantly expanded the reach of its anti-bribery laws. While KKR Credit has developed and implemented policies and procedures designed to ensure compliance by KKR Credit and its personnel with the FCPA and other anti-bribery laws, such policies and procedures might not be effective in all instances to prevent violations. Any determination that KKR Credit has violated the FCPA or other applicable anti-corruption laws or anti- bribery laws could subject it to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect KKR Credit’s business prospects and/or financial position, as well as the ability of a KKR Credit Fund or Other Client to achieve their investment objective and/or conduct its operations. The economies of many countries are heavily dependent upon international trade and, accordingly, could be materially and adversely affected by protective trade barriers and economic conditions in the countries with which they trade. In addition, the economies of certain European and Asian countries are vulnerable to weaknesses in world prices for their commodity exports or fluctuations of worldwide commodity prices. Certain European and Asian countries have from time to time experienced high rates of inflation and have extensive external debt.

Changes Resulting from the United Kingdom’s Exit from the European Union The United Kingdom formally exited the European Union on January 31, 2020. During a transitional period that applies from December 31, 2020, affiliates of KKR Credit located in the European Union and the United Kingdom will have largely the same rights as they currently have, including in relation to the exercise of passporting rights. However, the nature and extent of the future relationship between the United Kingdom and the EU is currently subject to negotiation and remain unclear. The United Kingdom could leave the EU without any agreement as to the terms of the future relationship. The resulting legal, regulatory and political uncertainty in this regard have impacted and will likely continue to impact KKR Credit Funds and Other Clients and its portfolio companies in a variety of ways, not all of which are currently readily apparent, with the materiality of any risks dependent in large part on actions to be taken by the United Kingdom and the EU. Certain KKR Credit Funds and Other Clients could have portfolio companies and other issuers with significant operations and/or assets in the United Kingdom, any of which could be adversely impacted by any new legal, tax and regulatory environment, whether by increased costs or impediments to the implementation of their business plan. Moreover, the uncertainty with respect to Brexit might adversely affect KKR Credit’s ability to source investments in portfolio companies that are located in the United Kingdom, or derive revenues from, the United Kingdom. Brexit could also impair KKR Credit’s ability to recruit, retain and motivate new employees and retain key employees. Uncertainty Regarding Ongoing Trade Negotiations between the United States and China As noted below in “Market, Economic and Political Risks,” market disruption can negatively impact funds such as KKR Credit Funds and Other Clients. Trade tensions, for example, between the United States and China as well as among the United States and other countries, have had and likely will continue to have an adverse impact on global economic conditions. In July 2018 and 2019, the United States and China implemented a number of tariffs and retaliatory tariffs on a variety of imports from each other targeting a variety of sectors including aerospace, information and communications technology, industrial machinery, automobiles and agricultural products Although an initial trade deal was subsequently reached in January 2020 between the two countries there remains much uncertainty as to whether this and further trade negotiations between the United States and China will be successful and how the trade tensions between the United States and China will progress. If trade tensions between the United States and China continue or escalate, or if additional tariffs or trade restrictions are implemented by the United States, China or other countries in connection with trade disputes, there could be material adverse effects on the economies of numerous countries, and KKR Credit Funds and Other Clients and their portfolio investments could be materially and adversely affected. Pandemics, Epidemics and Other Public Health Crises Pandemics, epidemics or other public health crisis, periodically adversely impact KKR Credit, KKR Credit Funds, Other Clients and their portfolio companies, both regionally, and, in connection,, for example with the COVID-19 pandemic, a worldwide basis. The continuing spread of COVID-19 and other pandemics has had, and will continue to have, a material adverse impact on local economies in the affected jurisdictions and also on the global economy as cross border commercial activity is impacted by government and private measures seeking to contain its spread. In addition to these developments having potential adverse consequences for the portfolio companies and other issuers Clients’ investments therein, the operations of KKR Credit and KKR Credit Funds and Other Clients in many jurisdictions will be adversely impacted, including as a result of government and private mandated quarantine measures, business closures and suspensions and travel restrictions, and any related health issues of such personnel, including key executives. Disruptions to commercial activity relating to the imposition of quarantines or travel restrictions (or more generally, a failure of containment efforts) will adversely impact investments of KKR Credit Funds and Other Clients, including by delaying or causing supply chain disruptions or by causing staffing shortages. Any of foregoing could materially and adversely affect the ability of KKR Credit Funds and Other Clients to source, manage and divest their investments and their ability to fulfil their investment objectives. Similar consequences could arise with respect to other comparable infectious diseases. The outbreak of COVID-19 has contributed to, and could continue to contribute to, volatility in financial markets, including changes in interest rates. COVID-19 and other outbreaks like it have negative impacts on economic fundamentals and consumer confidence, increase the risk of default of particular portfolio companies, reduce the availability of debt financing to KKR Credit Funds and Other Clients and potential purchasers of their portfolio companies, negatively impact market values, cause credit spreads to widen, and impair liquidity and capital resources, all of which would be expected to have an adverse effect on the returns of KKR Credit Funds and Other Clients. No assurance can be given as to the effect of these events on the value of KKR Credit Funds’ and Other Clients’ investments. The impact of a public health crisis such as COVID-19 (or any future pandemic, epidemic or other outbreak of a contagious disease) is difficult to predict, which presents material uncertainty and risk with respect to the performance of KKR Credit Funds and Other Clients. Subsequent to December 31, 2019, the global financial markets have experienced considerable volatility, and economic and financial market conditions have significantly deteriorated as compared to the quarter ending December 31, 2019. The assets under management disclosed in KKR Credit’s Form ADV Part 1, which is as of December 31, 2019, does not take into account these subsequent events, the effects of which KKR Credit expects will be adverse on the investment performance of the KKR Credit Funds and Other Clients. KKR Credit values investments by reference to one or more inputs and methodologies, including, to the extent applicable, public and private market quotations for the investment, public and private market quotations for assets the value of which can serve as a reference to the value of the investment, discounted cash flow analysis, valuations at multiples of specific financial measurements (e.g., EBITDA) based on multiples at which comparable companies trade, and estimates of the fair value of the assets and liabilities on an entity’s balance sheet. As an example of how these inputs could impact the investment performance of the KKR Credit Funds and Other Clients and the assets under management of KKR Credit, to the extent that KKR Credit determines the value of an investment in whole or in part by reference to public market valuations, KKR Credit expects these investment values to be negatively impacted by recent market events and the assets under management of KKR Credit to be reduced accordingly.

Foreign Direct Investment Considerations including CFIUS Certain investments by KKR Credit Funds and Other Clients that involve the acquisition of a business connected with or related to national security or critical infrastructure could be subject to review and approval by the U.S. Committee on Foreign Investment in the United States (“CFIUS”) and/or non-U.S. national security/investment clearance regulators depending on the beneficial ownership and control of interests in the KKR Credit Fund or Other Client. In the event that CFIUS or another regulator reviews one or more of a KKR Credit Fund’s or Other Client’s proposed or existing investments, there can be no assurances that the KKR Credit Fund or Other Client will be able to maintain, or proceed with, such investments on terms acceptable to the KKR Credit Fund or Other Client. CFIUS or another regulator could seek to impose limitations on or prohibit one or more investments of the KKR Credit Fund or Other Client. Such limitations or restrictions might prevent a KKR Credit Fund or Other Client from maintaining or pursuing investments and could also limit the number of potential buyers to whom a KKR Credit Fund or Other Client can sell its investments to, which could adversely affect the performance of a KKR Credit Fund or Other Client with respect to such investments. In addition, non-U.S. investors in KKR Credit Funds and Other Clients comprise or are likely to comprise a substantial portion of the aggregate capital commitments of a KKR Credit Fund or Other Client, which increases both the risk that investments could be subject to review by CFIUS, and the risk that limitations or restrictions will be imposed by CFIUS or other non-U.S. regulators on the portfolio investments of KKR Credit Funds or Other Clients. In the event that restrictions are imposed on any investment by a KKR Credit Fund or Other Client due to the non-U.S. status of an investor or group of investors or other related CFIUS or national security considerations, KKR could choose to restrict such investor’s or such group of investors’ ability to invest in or receive information with respect to any such portfolio investment or cause the investor to withdraw from a KKR Credit Fund. However, there can be no assurance that any restrictions implemented on any such investor or any such group of investors will allow the KKR Credit Fund to maintain, or proceed with, any investment. Investments through Offshore Holding Companies KKR Credit Funds and Other Clients are permitted to invest in portfolio companies operating in a particular country indirectly through holding companies organized outside of such country. Government regulation in the first country from time to time, however, restricts the ability of the portfolio companies to pay dividends or make other payments to a foreign holding company. Additionally, any transfer of funds from a holding company to its operating subsidiary, either as a shareholder loan or as an increase in equity capital, is from time to time subject to registration with or approval by government authorities in such country. Such restrictions could materially and adversely limit the ability of any foreign holding company in which KKR Credit Funds or Other Clients invest to grow, make investments or acquisitions that could be beneficial to its businesses, pay dividends, or otherwise fund and conduct its business. Regulatory Approvals and Government Licenses

Portfolio companies in certain jurisdictions are be dependent upon the grant, renewal or continuance in force of appropriate contracts, licenses, permits and regulatory approvals and consents which are generally valid only for a defined time period, subject to limitations or provide for withdrawal in certain circumstances. There can be no assurance that a portfolio company targeted by a KKR Credit Fund or Other Client will be able to (i) obtain all such required regulatory approvals and licenses that it does not yet have or that it will require in the future; (ii) obtain any necessary modifications to existing regulatory approvals and licenses; or (iii) maintain required regulatory approvals. Delay in obtaining or failure to obtain and maintain in full force and effect any regulatory approvals and licenses, or amendments thereto, or delay or failure to satisfy any regulatory conditions or other applicable requirements could prevent a portfolio company from operating in accordance with a KKR Credit Fund’s or Other Client’s expectations in respect of such company, the completion of a previously announced acquisition or sales to third parties, could limit the portfolio company’s ability to engage in certain regulated activities or could otherwise result in additional costs to a portfolio company and an adverse impact on any investment by a KKR Credit Fund or Other Client in such company. Additionally, governments and other regulators often impose conditions on the operations and activities of a portfolio company as a condition of granting its approval or to satisfy regulatory requirements. Such conditions, which could be statutory or commercial in nature, could limit a portfolio company’s ability to invest in competing industries or acquire significant market power in a particular market, or provide a disincentive to do so. Further, governmental agencies from time to time impose conditions of ongoing ownership or equivalent requirements on a portfolio company in respect of underlying projects. This could include a requirement that certain assets remain managed by a portfolio company, a KKR Credit Fund or Other Client or their affiliates in the absence of further approval. Such conditions are susceptible to revision or cancellation and legal redress could be uncertain or delayed. There can be no assurance that joint ventures, licenses, license applications or other legal arrangements will not be adversely affected by the actions of government authorities or others and the effectiveness of and enforcement of such arrangements cannot be assured. Subscription Facilities; Guarantees; Contractual Obligations Certain KKR Credit Funds may obtain one or more revolving credit facilities (“subscription facilities”). Subscription facilities of KKR Credit Funds are expected to be used by KKR Credit Funds to make investments, or otherwise in connection with the making, holding or disposition of investments, including without limitation to support ongoing operations and activities of KKR Credit portfolio companies and entities through which investments are directly or indirectly held (including on an aggregated basis with co-investors or other investor please register to get more info

Except as described below, neither KKR Credit nor any of its executive officers, members of its investment committees or portfolio management committees or other “management persons” as defined in Form ADV has been subject to legal or disciplinary events related to this Item.

On June 29, 2015, without admitting or denying the SEC’s findings, KKR consented to the entry of an order to cease and desist from committing or causing any violations and future violations of sections 206(2) and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder. According to the SEC order, during the period from 2006 to 2011 KKR did not expressly disclose in its flagship private equity fund limited partnership agreements that it did not allocate broken deal expenses to its co-investment vehicles (including co- investment vehicles established for third party co-investors and co-investment vehicles established for executives, certain consultants and others) and this lack of disclosure resulted in a misallocation of expenses to KKR’s flagship private equity funds for that period. The order also finds that KKR did not adopt and implement a written compliance policy or procedure governing its fund expense allocation practices until 2011. KKR agreed in the settlement to pay disgorgement of $14,165,968, prejudgment interest of $4,511,441 and a civil monetary penalty of $10,000,000.

Neither KKR Credit nor any of its current executive officers, members of its investment committees or portfolio management committees or other “management persons” as defined in Form ADV has been subject to the legal or disciplinary events related to this Item or is otherwise required to disclose any event required by this Item.

In the ordinary course of business, KKR and its affiliates are party to litigation, investigations, inquiries, employment-related matters, disputes and other potential claims. Additional information regarding such matters will also be made available in current public filings with the SEC for the Public Company. For further information, please see: http://ir.kkr.com/kkr_ir/kkr_sec.cfm. please register to get more info

Affiliated Broker-Dealers
KKR Credit is an affiliate of KKR Capital Markets LLC and MCS Capital Markets LLC, each of which is registered as a broker-dealer in the U.S. with the SEC and the Financial Industry Regulatory Authority, Inc. (“FINRA”). KKR Credit is also affiliated with KKR Capital Markets LLP located in London, which is authorized and regulated by the U.K. Financial Conduct Authority to conduct broker-dealer activities in the United Kingdom; KKR Capital Markets (Ireland) Limited located in Dublin, which is authorized and regulated by the Central Bank of Ireland to conduct broker-dealer activities in Ireland; KKR Capital Markets Japan Limited, which is a certified Type I and Type II Financial Instruments Business Operator (broker-dealer) licensed by the Japanese Financial Services Agency; KKR Capital Markets Asia Limited, which is licensed by the Hong Kong Securities and Futures Commission to conduct certain broker-dealer activities; and KKR Capital Markets India Private Limited, which is licensed by the Securities and Exchange Board of India (“SEBI”) as a merchant bank that is authorized to execute capital market mandates, underwrite issues, offer investment advisory and other consultancy services in connection with securities. In addition, KKR Credit is also affiliated with KKR Australia Pty Limited, KKR Australia Investment Management Pty Limited, KKR MENA Limited, and KKR Saudi Limited, which hold financial services licenses from the Australian Securities and Investment Commission, the Dubai Financial Services Authority, and the Capital Market Authority in Saudi Arabia, respectively, permitting them among other things to conduct capital raising and other broker-dealer activities (collectively, the “Affiliated Brokers”).

Affiliated Brokers (including their respective related lending vehicles) manage or otherwise participate in underwriting syndicates and/or selling groups with respect to the securities and debt instruments of portfolio companies and other non-controlled entities in or through which KKR Credit Funds or Other Clients invest, including in respect of securities or other instruments of such portfolio companies in which KKR Credit Funds or Other Clients have not invested and with respect to securities and other instruments held directly or indirectly by certain co-investment vehicles. From time to time, affiliated brokers are otherwise involved in the public or private placement of such securities and other instruments, and/or the provision of capital markets advisory services to portfolio companies and other non-controlled entities in or through which KKR Credit Funds or Other Clients invest, including in connection with mergers, acquisitions and restructurings, and will alone, or with other counterparties, which might include other KKR investment vehicles, third party banks or other unaffiliated finance providers, provide acquisition financing, lines of credit, bridge financing, hedging and other corporate lending services to such entities in addition to financing provided through a KKR Credit Fund’s or Other Client’s investment. Affiliated Brokers also provide loans and lines of credit to the portfolio companies of KKR Credit Funds and Other Clients through the Affiliated Brokers’ respective related lending vehicles. Such financing and underwriting services may also be provided to a third party in which a KKR Credit Fund or Other Client (or portfolio company) may invest. . Affiliated Brokers also provide syndication services to such entities including in respect of co- investments in transactions participated in by KKR Credit Funds or Other Clients. Affiliated Brokers will generally receive fees, including underwriting, placement, syndication fees, transaction, commissions, underwriting discounts, interest payments and other compensation, which are payable in cash or securities and/or loans, in respect of the activities described above. Affiliated Brokers from time to time waive such fees.

Affiliated Brokers and other KKR Credit affiliated entities will, as a consequence of such activities, from time to time hold positions in instruments or securities and/or loans issued by portfolio companies, including, for example, where a KKR proprietary entity commits to a fund the shortfall amount, if any, resulting from the incomplete syndication by an Affiliated Broker of a portfolio co-investment opportunity. Under such circumstances, a KKR proprietary entity will commit to provide capital support for the syndication on a short-term basis (i.e. to provide certainty to KKR Credit Funds and Other Clients that there will be sufficient capital to complete the proposed transaction) or fund a different instrument or security in the portfolio company than that held by KKR Credit Funds and Other Clients to facilitate the syndication, which KKR proprietary entities may in either scenario sell down prior to KKR Credit Funds or Other Clients disposing of their respective investments in the portfolio company. An Affiliated Broker also has acted and could act in the future as placement agent or underwriter of securities and/or loans of a third party that a KKR Credit Fund or Other Client purchases (for example, a co-investment vehicle). Where an Affiliated Broker acts as the placement agent for a KKR Credit Fund in certain jurisdictions and such Affiliated Broker does not receive compensation for such service; however if compensation is received, such compensation would be made on a fully disclosed basis. The Affiliated Brokers do not otherwise execute transactions on behalf of KKR Credit Funds or Other Clients. While fees, commissions, upfront placement fees, interest payments and other compensation paid to the Affiliated Brokers are generally believed by KKR Credit to be reasonable and charged at rates that are market rates for the relevant activities, such compensation is generally determined through negotiation with related parties. KKR Credit Funds or Other Clients generally do not have the right to share in the compensation received by an Affiliated Broker for its role in any transaction. Affiliated Brokers do not share in any transaction fees, which are generally allocated among KKR Credit Funds, Other Clients and KKR Credit Associates Vehicles as discussed in Item 5 - Fees and Compensation. Under certain circumstances, the relationship KKR Credit has with its Affiliated Brokers gives rise to a potential conflict of interest between KKR Credit and KKR Credit Funds or Other Clients that have an interest in any portfolio companies or investment vehicles with respect to which the Affiliated Brokers provide services (please see the discussion below for further information as to how such conflicts are addressed). In particular, such relationships could create a perception that KKR has sought to influence. KKR Credit might be seen as incentivized to seek to influence the decision by a portfolio company’s management to retain an Affiliated Broker, or to borrow from or otherwise transact with an Affiliated Broker, instead of other unaffiliated broker-dealers or other service providers or counterparties that are more appropriate or offer better terms. Where an Affiliated Broker (or another KKR entity) acts as a lender to a portfolio company in which a KKR Credit Fund or Other Client holds investments in the same or different levels of the capital structure, under certain cases, the arrangement will lead to a conflict between the Affiliated Broker and the KKR Credit Fund or Other Client in the event of a default by, or the liquidation of, the portfolio company or a restructuring or renegotiation of the terms of the loan (similar conflicts can also arise where KKR is a lender to a portfolio company out of its proprietary assets). In certain circumstances, including without limitation, where a portfolio company becomes distressed and the participants in the relevant offering have a valid claim against the underwriter, the participating KKR Credit Fund or Other Client will have a conflict in determining whether to seek recourse or sue an Affiliated Broker. KKR Credit could also be seen as incentivized to structure portfolio company transactions, including related co-investment opportunities, so that they require the use of a broker-dealer (and consequently provide an opportunity for an Affiliated Broker to be retained by a portfolio company or acquisition company established for the relevant transaction and generate fees, including underwriting, placement, syndication fees, transaction fees, commissions, underwriting discounts, interest payments or other compensation for such an Affiliated Broker).

Affiliated Brokers also provide financing and capital markets services to third parties that are not portfolio companies including third parties that are competitors of portfolio companies of particular KKR Credit Funds or Other Clients, or that are service providers, suppliers, customers, or other counterparties with respect to such companies (“Competitor Companies”) and act as placement agent in respect of investment funds that are sponsored and managed by other third party investment managers, including funds that could compete with KKR Credit Funds or Other Clients. Affiliated Brokers also act as placement agent in respect of investment funds that are sponsored and managed by third parties (for example, certain investee companies of KKR Credit as described in Item 4) and receive consideration for such services. In providing such services to, or with respect to, such funds or companies, Affiliated Brokers will not take into consideration the interests of the relevant portfolio companies or KKR Credit Funds or Other Clients. In addition, Affiliated Brokers can also be engaged to provide financing or other capital markets services to third parties in connection with transactions that are also appropriate for a KKR Credit Fund or for Other Clients. In some cases, these services offered to third parties in connection with a transaction might be provided concurrently with services being provided in a similar manner to a KKR Credit Fund or Other Client even if the KKR Credit Fund or Other Client has a competing interest with the third party. Affiliated Brokers providing services to third parties, including to Competitor Companies, have and will come into possession of information that they are prohibited from acting on (including on behalf of a KKR Credit Fund or Other Client) or disclosing to KKR Credit as a result of applicable confidentiality requirements or applicable law, even though such action or disclosure would be in the best interests of a KKR Credit Fund or of Other Client. An Affiliated Broker’s ability to receive commissions or other transactional compensation in certain capital markets transactions on the basis of a KKR Credit Fund’s or Other Client’s participation is limited in certain circumstances. As a result, in the event that such services are provided to an issuer that is or becomes a potential investment opportunity for a KKR Credit Fund or Other Client, KKR Credit, through the Affiliated Brokers, will, in certain cases, have a conflict of interest between a KKR Credit Fund or Other Client investment opportunity or a related capital markets transaction. Where an Affiliated Broker serves as underwriter with respect to a security in which a KKR Credit Fund or Other Client invests, such KKR Credit Fund or Other Client will be subject to a “lock-up” period following the offering under applicable regulations during which time its ability to sell the security that it continues to hold is restricted. In certain cases, this will prejudice the KKR Credit Funds’ or Other Clients’ ability to dispose of such security at an opportune time. Affiliated Brokers have access to confidential and/or material non-public information regarding KKR Credit Funds, Other Clients or their portfolio companies and, subject to applicable law and confidentiality agreements, are permitted to use such information in connection with financing and other services provided by the Affiliated Brokers.

Transactions involving a KKR Credit Fund or Other Client and an Affiliated Broker are reported periodically to KKR’s Global Conflicts Committee. In addition, KKR Credit reviews such transactions to ensure that the requirements of Section 206(3) of Advisers Act in respect of principal transactions between any KKR Credit Fund or Other Client and KKR or its affiliates (including any Affiliated Broker) are complied with in the context of such transactions. Transactions involving a KKR Credit Fund or Other Client and an Affiliated Broker are reported periodically to KKR Credit Conflicts Committee.


Other Investment Advisers
Special Purpose Vehicles

KKR Credit Advisors (US) has the following wholly-owned special purpose subsidiaries in the U.S., and the Cayman Islands, through which it provides investment management and administration services to certain KKR Credit Funds and Other Clients:

 KAM Advisors LLC  KAM Credit Advisors LLC  KAM Fund Advisors LLC  KKR Credit Fund Advisors LLC  KKR CS Advisors I LLC  KKR FI Advisors Cayman Ltd.  KKR FI Advisors LLC  KKR Financial Advisors II LLC  KKR Mezzanine I Advisors LLC Each of the above entities is a special purpose vehicle (each, a “KCA SPV”) established by KKR Credit Advisors (US) for certain administrative and operational convenience purposes. KKR Credit Advisors (US) is the sole member or shareholder, as applicable, of each KCA SPV. Accordingly, the activities of each KCA SPV are wholly controlled by KKR Credit Advisors (US). Each of the directors of KKR FI Advisors Cayman Ltd is an employee of KKR Credit Advisors (US). Relying Advisers KKR Credit Advisors (US) is affiliated with KKR Credit Advisors (Ireland), which is regulated by the Central Bank of Ireland. KKR Credit Advisors (Ireland) provides management, sub-advisory and administration services to or otherwise in respect of specific KKR Credit Funds or Other Clients and provides certain operational and other efficiencies with respect to such services. KKR Credit Advisors (Ireland) is subject to KKR Credit’s regulatory oversight and its Code of Ethics (see response to Item 11 below) together with its other compliance policies and procedures as adopted by KKR Credit pursuant to the requirements of the Advisers Act. More particularly, certain KKR Credit officers and employees serve as dual personnel of both KKR Credit and KKR Credit Advisors (Ireland). KKR Credit treats all officers and other personnel of KKR Credit Advisors (Ireland) as its “associated persons” and access persons for purposes of the Advisers Act.

Participating Affiliates KKR Credit Advisors (US), either directly or indirectly, controls or is under common control with KKR Credit Advisors (EMEA) LLP, which is located in the United Kingdom. KKR Credit Advisors (EMEA) LLP is a “Participating Affiliate” and is involved in identifying, negotiating and monitoring investments recommended by KKR Credit Advisors (US) to KKR Credit Funds and Other Clients in the relevant jurisdictions and regions. KKR Credit Advisors (EMEA) LLP is authorized and regulated by the U.K. Financial Conduct Authority as an investment manager and is subject to KKR Credit’s supervision and Code of Ethics together with its compliance policies and procedures as adopted pursuant to the requirements of the Advisers Act, as applicable (in addition to applicable local laws and regulation). Any employees of the Participating Affiliates who provide services to KKR Credit’s Clients will be considered “associated person” of KKR Credit and access persons for purposes of the Advisers Act.

Kohlberg Kravis Roberts & Co. L.P.

KKR Credit is also affiliated with KKR, which is its parent company, and KKR’s other subsidiaries and affiliated entities that manage KKR’s private equity funds and other funds, investment vehicles and accounts (“KKR Funds”). KKR is separately registered under the Advisers Act as an investment adviser. Certain executives of KKR serve on investment committees established by KKR Credit. KKR Credit also, from time to time, acts as sub-adviser in respect of capital allocated within KKR Funds to strategies implemented by KKR Credit and also delegates sub-advisory authority to KKR in respect of capital allocated within certain KKR Credit Funds or Other Clients to strategies implemented by KKR (in each case, at no incremental cost to the relevant KKR Fund, KKR Credit Fund or Other Client). Please see Item 11 for a discussion of the relationship of KKR Credit, KKR Credit Funds and Other Clients and the KKR Funds. KKR is affiliated with KKR Credit Advisors (Ireland). Certain employees of KKR Credit Advisors (Ireland) are employees of KKR. Certain KKR Credit Advisors (Ireland) personnel also participate in KKR Credit Associates Vehicles. Private funds, managed accounts and CLOs managed and advised by KKR Credit Advisors (Ireland) generally pursue primarily European credit strategies including investments in European leveraged loans and high yield bonds, alternative credit opportunities such as investments in mezzanine-like instruments, originated senior loans and specific types of syndicated credit investments (e.g. investments in revolver credit facilities) and other structured and illiquid credit investments. Please see Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading for a discussion of the relationship of KKR Credit, KKR Credit Funds and Other Clients. Please see Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading which discusses the relationship of KKR Credit, KKR Credit Funds, Other Clients, Stakes and Seed Managers, and Stakes and Seed Funds for further information. FS/KKR Advisor, LLC On April 9, 2018, KKR Credit and FS Investments combined their respective BDC platforms through KKR FS/KKR Advisor, which registered as an investment adviser with the SEC on April 2, 2018. FS/KKR Advisor provides investment advisory services to BDCs previously advised and sub-advised by KKR Credit, and BDCs previously advised by FS Investments. KKR Credit owns a 50% interest in FS/KKR Advisor. KKR Capstone In conjunction with the Reorganization described above under Item 4 – “Ownership/Structure,” KKR acquired KKR Capstone on January 1, 2020. KKR Capstone executives became employees of KKR after KKR’s. Prior to the acquisition, KKR Capstone was owned and controlled by its senior management and was not a subsidiary or affiliate of KKR. KKR Capstone Japan Limited is licensed by the Tokyo Labor Bureau to conduct an employment placement business. For further information, please also see Item 5 “KKR Capstone, RPM and Other Consultants.”

KKR Alternative Investment Management KKR Credit is affiliated with KKR AIM which is regulated by the Central Bank of Ireland, is an authorized EU alternative investment manager and separately files reports as an exempt reporting adviser with the SEC. KKR AIM enters into delegation and/or sub-advisory agreements with KKR Credit under which KKR Credit will provide certain portfolio management services to KKR AIM in connection with investment funds with respect to which KKR AIM serves as alternative investment manager for the purposes of the AIFMD.

Commodity Pool Operators and Commodity Trading Advisors

As a result of providing investment advisory services to certain KKR Credit Funds that invest in commodity futures and other commodity interests, KKR Credit, certain KKR Credit GPs and other related entities from time to time constitute or become commodity trading advisors and/or commodity pool operators for the purpose of the rules and regulations issued by the U.S. Commodity Futures Trading Commission (“CFTC”) under the U.S. Commodity Exchange Act and as such, will rely on certain exemptions from registration with the CFTC under that Act or, in the event that such exemptions cease to apply, register under the applicable regulatory regime. As such status is incidental to KKR Credit’s investment management activities with respect to the relevant KKR Credit Funds, KKR Credit does not view such status as giving rise to a material conflict of interest in respect of such KKR Credit Funds or any other KKR Credit Funds or Other Clients. The CFTC has proposed but not adopted rules that limit the total amount of hedging that investment funds controlled by a single corporate group enter into. While these rules currently apply only to agricultural products, to the extent the CFTC expands them to cover oil and gas this could materially adversely impact KKR Credit Funds or Other Clients. Pooled Investment Vehicles and Regulated Subsidiaries and Sponsors of Limited Partnerships KKR, KKR Credit and certain of their respective affiliates serve as sponsors or syndicators of a number of limited partnerships, including KKR Funds and KKR Credit Funds. KKR Credit also primarily serves as investment adviser to KKR Funds that are pooled investment vehicles. In addition, its affiliates and KKR also serve as investment advisers of investment vehicles and accounts (i.e., KKR Funds) that are, for the most part, pooled investment vehicles. While primarily unregulated, certain of such pooled vehicles are registered with regulatory authorities in their home jurisdiction such as the Cayman Islands or Ireland or in jurisdictions in which interests in such pooled investment vehicles are marketed, such as Korea or Japan. As discussed more fully above and in response to Item 11, KKR Credit Funds and KKR Funds may engage in transactions with or alongside each other that give rise to material conflicts of interest. KKR and KKR Credit have adopted investment allocation policies and procedures and conflict of interest policies and procedures designed to facilitate proper management of conflicts of interest arising between KKR Funds and KKR Credit Funds. KKR and certain KKR Credit Funds have established regulated subsidiaries as required under applicable law in order to permit such subsidiaries or KKR Credit Funds to make portfolio investments in certain jurisdictions. As discussed in Item 11, KKR Credit’s relationship with KKR also gives rise to additional conflicts of interest. Please see Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading for a discussion of the potential conflicts raised by KKR Credit’s relationship with these and other affiliates and the policies and procedures KKR Credit has adopted to address these conflicts.

Dual Officers and Employees Certain Employees of KKR Credit, including investment and marketing professionals, are also associated persons of one or more Affiliated Brokers (“Dual Personnel”). In this capacity, Dual Personnel are shared with and provide services to KKR Credit and also provide services to one or more affiliated entities. Dual Personnel can provide investment advisory services to KKR Credit Funds and Other Clients, participate in the marketing of KKR Credit Funds and KKR Funds, and, in certain cases, participate in the capital markets activities of Affiliated Brokers. The potential conflicts of interest discussed above in relation to Affiliated Brokers are more acute when investment professionals of KKR Credit participate in the capital markets activities of Affiliated Brokers with respect to assets held by KKR Credit Funds and Other Clients; in particular, when Dual Employees originate loans and other credit investments that are suitable for KKR Credit Funds and Other Clients, but that also are syndicated to third-party investors by an Affiliated Broker. The compensation of Dual Personnel that provide services to multiple entities is based on a number of factors, which include, without limitation, the profitability of the affiliated entities, the performance of client accounts at the affiliated entities, and the amount of assets under management at the affiliated entities. Such Dual Personnel are, under certain circumstances, incentivized to allocate more of their time and attention to more profitable affiliated entities, which creates a conflict of interest. In addition, such Dual Personnel work with third party clients who are interested in acquiring assets that KKR Credit Funds or Other Clients are interested in acquiring. To mitigate these conflicts, KKR Credit and the Affiliated Brokers maintain compliance policies and procedures designed to ensure that such investment opportunities are made available to advisory clients before they are syndicated to third parties, and that the compensation of Dual Personnel is not structured in a manner that favors services provided to third-parties over those provided to KKR Credit Funds and Other Clients. Conflicts are further mitigated by each such Dual Personnel’s responsibility to (i) be subject to the supervisory oversight of each affiliated entity when acting on its behalf, and (ii) render services in the client’s best interest pursuant to the Firm’s Code of Ethics. Other Businesses KKR Funds have acquired a controlling interest in Avendus Capital Private Limited (together with its wholly-owned subsidiaries, “Avendus”), which KKR and/or its affiliates are deemed to control due to their control of such KKR Funds. Avendus engages in investment banking, private wealth management and alternative asset management primarily in India and Southeast Asia. On March 30, 2017, KKR’s Indian capital markets and credit asset management businesses were reorganized, to create a new parent company, KKR India Financial Services Pte. Ltd. (“KIFL”), domiciled in Singapore, through which KCM Capital Markets India Private Limited (“KCM India”) and KKR India Financial Services Private Limited (“NBFC I”) are now held. KKR has a significant equity interest in KIFL. KKR separately holds an equity interest in KKR India Asset Finance Private Limited (“NBFC II”). NBFC I and NBFC II are each registered by the Reserve Bank of India as non-deposit taking, non-banking financial companies (“NBFCs”) that are authorized to undertake lending and financing activities in India. NBFC I is primarily focused on corporate lending in India, whereas NBFC II is primarily focused on real-estate debt investments in India. KCM India is licensed by the SEBI (i) as a foreign portfolio investor or foreign venture capital investor to make investments in Indian securities, (ii) as a merchant bank that is authorized to execute capital market mandates, underwrite issues, offer investment advisory and other consultancy services in connection with securities, and (iii) as investment manager and sponsor of alternative investment funds established in India that have raised capital from Indian institutional and fund investors. In addition, a KKR affiliate has acquired an interest in an “asset reconstruction company” in India which sources, services and/or resolves performing or non-performing loans and provides services relating to loan administration, loan or asset resolution, restructuring and reconstruction. KKR Credit Funds and Other Clients could in the future invest in securities advised by such asset reconstruction company.

Please see Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading for a discussion of the potential conflicts that are raised by KKR’s relationship with these and other affiliates and the policies and procedures KKR Credit has adopted to address these conflicts.

Please also see Item 11 for a discussion of the Stakes and Seed Managers and Stakes and Seed Funds. please register to get more info

Code of Ethics
KKR Credit is subject to a Code of Ethics (the “Code”) in accordance with Rule 204A-1 under the Advisers Act.

The Code has been established by its affiliate, KKR, for all of its investment advisory subsidiaries, including KKR Credit. The Code sets out standards of business and personal conduct for each Employee (which for these purposes includes other persons as set out in the Code, including certain consultants, advisors, temporary employees and other persons and addresses conflicts that arise from personal trading by such persons and provides for disciplinary sanctions for Code violations. The Code is available upon written request of current or prospective investors in KKR Credit Funds and Other Clients.

The policies and procedures set forth in the Code recognize that as an investment adviser, KKR Credit is in a position of trust and confidence with respect to the KKR Credit Funds and Other Clients and has a duty to place the interests of the KKR Credit Funds and Other Clients before the interests of KKR Credit and its Employees (which for these purposes includes other persons as set out in the Code, including certain consultants, advisors, temporary employees and other persons). This duty includes an obligation to address or mitigate both conflicts of interest and the appearance of any conflicts of interest. The Code also recognizes that as an investment adviser registered under the Advisers Act, KKR Credit has a further obligation to comply with the provisions of the Advisers Act as well as the other U.S. federal securities laws. The Code includes a code of conduct adopted by KKR Credit which requires Employees to (i) act with integrity, honesty, competence, and in an ethical manner when dealing with the public, regulators, clients, investors, prospective investors and their fellow Employees; (ii) adhere to the highest standards with respect to any potential material conflicts of interest with KKR Credit Funds and Other Clients; and (iii) preserve the confidentiality of information that they obtain in the course of KKR Credit’s business and use such information properly, consistent with applicable legal standards, and not in any way adverse to the interests of any KKR Credit Funds or Other Clients. Under the Code and Firm policy, Employees are prohibited from trading in securities and/or loans of any company while in possession of material, non-public information regarding the company. This prohibition applies to KKR-related securities and the securities of KKR affiliates, as well as other issuers. The Code also includes a personal securities investment and reporting policy. This policy, among other things, significantly restricts an Employee’s ability to engage in personal securities transactions with respect to publicly-trade equity or debt of corporate issuers to avoid conflicts of interest and preclude the potential misuse of proprietary and material non-public information with respect to such issuers. The policy also requires preclearance of investments in private companies and non-KKR or KKR Credit Funds, and requires Employees to disclose all brokerage or securities accounts held in the Employee’s name or over which the Employee has any direct or indirect beneficial ownership, including accounts over which investment discretion is exercised either directly or indirectly.

Certain investment personnel of KKR Credit also maintain personal private investment holdings which from time to time include investments in private companies and assets that are owned or become targeted for acquisition by KKR or KKR Credit, or KKR or KKR Credit Funds, or Other Clients (or investments in private assets that compete with assets or business owned or targeted by KKR Credit Funds or Other Clients) and/or private funds that invest in or own private companies or other issuers or assets that compete with assets or businesses owned or targeted by KKR or KKR Credit Funds or Other Clients (i.e. through the acquisition of or investment in an asset of an affiliated or unaffiliated private fund sponsor). Certain of these personal investments are maintained with third-party investment managers, including third-party investment managers or sponsors that KKR Credit or its affiliates, KKR Credit Funds or Other Clients have an economic interest in, who sponsor investment vehicles that compete with KKR or KKR Credit, or that KKR, KKR Credit or their respective affiliates recommend to their respective clients (for example, through KKR’s customized portfolio solutions business). Furthermore, certain of these personal investments have terms that are more favorable than those routinely offered by the unaffiliated investment manager (for example, reduced fees) and those favorable terms will not be shared with and might not be available to KKR Credit Fund or Other Clients. Such personal investments give rise to potential or actual conflicts of interest between KKR Credit Funds and Other Clients on the one hand, and KKR, KKR Credit and their respective affiliates, on the other hand, including, in particular, to the extent such investment personnel participate in the management of a KKR Credit Fund’s or Other Client’s investments in such assets and the personal investment interests of such investment personnel are not aligned with those of a KKR Credit Fund or Other Client. In addition, certain KKR personnel hold investments in entities that are or become service providers to KKR or KKR Credit or portfolio companies of KKR or KKR Credit Funds or Other Clients. Although the relevant KKR Credit personnel do not have control or other influence over the decisions of the relevant service provider (including whether to enter into a business arrangement with KKR Credit or portfolio companies of KKR Credit Funds or Other Clients), a conflict of interest or the perception thereof could nevertheless arise in engaging the relevant entity as a service provider in light of the personal benefits that accrue through the investment they hold in the service provider. KKR Credit’s personal securities investment and reporting policies, which require the pre-approval from KKR’s Compliance Group on any personal private fund or private investments, seek to address any potential or actual conflicts of interest relating to personal private investments. The Code restricts Employees’ ability to conduct activities outside the Firm that conflict with the interests of the KKR or KKR Credit Funds or Other Clients, requires pre-approval for Employees to engage in certain outside business activities or receive and/or provide gifts and entertainment in excess of certain values and restricts Employees’ ability to make political donations. However, Employees, Senior Advisors, Industry Advisors, KKR Advisors, RPM and other Consultants from, time to time also serve as directors or interim executives, or otherwise be associated with companies that are competitors of portfolio companies of certain KKR or KKR Credit Funds or Other Clients (as discussed below). KKR’s Compliance Group receives and reviews trading and other reports and Employee certifications, questionnaires and pre-approval requests submitted pursuant to the Code to determine that personal trading (as well as other activities subject to compliance oversight) conducted by Employees and other covered persons is consistent with the requirements and restrictions set forth in the Code. Employees also engage in certain cases outside business activities, including serving on boards of directors of third party entities, which give rise to certain conflicts of interests. KKR’s Compliance Group reviews Employee certifications, questionnaires and pre-approval requests to identify such conflicts of interest.

Additionally, KKR and KKR Credit have adopted inside information barrier and other policies and procedures to provide for the proper handling of confidential information (i.e., nonpublic information received or created by KKR Credit in connection with its activities) to prevent violations of laws and regulations prohibiting the misuse of such information and to avoid situations that might create an appearance of such misuse. KKR’s Compliance Group is responsible for monitoring the information barriers established by the Firm, administering the information sharing policies and procedures, overseeing potential conflicts of interest, and escalating to an established oversight committee, as appropriate.

The Code is available upon written request of KKR Credit Funds or Other Clients and their current or prospective investors.
Participation or Interest in Client Transactions

Principal Transactions

In accordance with the anti-fraud provisions of the Advisers Act and with KKR Credit’s internal compliance policies and procedures, KKR Credit and its affiliates will not, as principal, sell a security to, or buy a security from, any KKR Credit Fund or Other Client without providing appropriate disclosure and obtaining the informed consent of such KKR Credit Fund or Other Client prior to the settlement of each such transaction, as well as the prior authorization of KKR Credit’s Chief Compliance Officer. The RIC and other regulated entities will generally not engage in principal transactions, except as permitted under the Investment Company Act and SEC guidance thereunder.

Principal transactions occur, for example, where KKR Credit warehouses an investment, in whole or in part, in one of its proprietary entities for the benefit of one or more KKR Credit Funds or seeds the initial portfolio of a KKR Credit Fund by making the initial commitment and capital contributions to the KKR Credit Fund pending the admission of third party investors to such KKR Credit Fund and the acquisition by the KKR Credit Fund of the investment from the proprietary entity or the participation by such third party investors in such seeded initial portfolio of investments. In these cases, a KKR Credit Fund or Other Client will seek to mitigate the conflict, for example, require that (i) the transaction price be determined to be fair by an independent valuation expert (the cost of which would be borne by the KKR Credit Fund or Other Client) or be calculated in accordance with a formula provided for in the governing documents of the KKR Credit Fund; and/or (ii) the consent of the respective KKR Credit Fund’s limited partner advisory committee, independent client representative or investors or the consent of the Other Client be obtained prior to the completion of the relevant transaction or in connection with the investors’ subscriptions to the KKR Credit Fund or the establishment of the Other Client relationship. For warehoused assets, the consent to transfer such assets to KKR Credit Funds or Other Clients is generally obtained through the signed approval of the subscription agreement or limited partnership agreement of the KKR Credit Fund or Other Client. As indicated in Item 10, Affiliated Brokers from time to time act as principal in underwriting or placing the securities of KKR Credit Funds or Other Clients. Prior to the receipt by a KKR Credit Fund of capital contributions from its investors for which a capital call notice has been given, a KKR Credit GP will under certain circumstances fund such amounts on a temporary basis in order to permit the KKR Credit Fund to ensure that an investment is made within the applicable time constraints. In addition, KKR Credit, a KKR Credit GP or one of their affiliates will, from time to time, fund certain general and administrative expenses of a portfolio company on a temporary basis in order to avoid a de minimis capital call to investors or to ensure timely payment of a KKR Credit Fund obligation, or provide an interest free loan to a platform portfolio company to cover its start-up and operating costs prior to the receipt by a KKR Credit Fund or Other Client of a capital call in respect of such expenses. Such amounts will be reimbursed to the KKR Credit GP at cost as and when such capital contributions are made by the investors in the KKR Credit Fund or through a reduction of subsequent distributions by the KKR Credit Fund. KKR Credit does not consider such temporary arrangements to be principal transactions. Stakes and Seed Managers

Affiliates of KKR Credit acquire or hold from time to time a non-controlling interest in a third-party hedge fund manager or fund of hedge fund manager (“Stakes and Seed Managers”) and funds or other vehicles sponsored or advised by such managers (referred to herein collectively as (“Stakes and Seed Funds”). For example, affiliates of KKR have acquired a 24.9% interest in BlackGold Capital Management L.P., a credit- oriented investment manager focused on energy and hard asset investments, a 39.6% interest in Marshall Wace LLP, a global alternative investment manager specializing in long/short equity products, and a 39.9% interest in PAAMCO Prisma Holdings LLC (“PAAMCO Prisma”), a liquid alternatives firm. Affiliates of KKR Credit also have investments certain real estate managers, such as Drawbridge Realty, and certain infrastructure investment managers, such as India Grid Trust. No Stakes and Seed Fund is an advisory client of KKR. From time to time, a Stakes and Seed Manager is retained as a non-discretionary sub-adviser by KKR Credit in respect of certain KKR Credit Funds or Other Clients. KKR and KKR Credit also, from time to time, act as a non-discretionary sub-adviser of a Stakes and Seed Manager and/or a Stakes and Seed Fund, including in particular with respect to co-investments made alongside KKR Credit Funds or Other Clients. For example, advisory affiliates of KKR and KKR Credit Fund act as a sub-adviser with respect to capital allocated by investment vehicles and other accounts managed and advised by PAAMCO Prisma, and PAAMCO Prisma acts as investment adviser or sub-adviser to investment vehicles and other accounts established by KKR, KKR Credit and/or their advisory affiliates. . Such transactions (which do not involve securities of KKR Credit advisory clients on both sides of the transaction) are neither principal transactions nor agency cross transactions. However, because of a KKR Credit affiliate’s financial interest in Stakes and Seeds Managers, an affiliate of KKR Credit will receive additional compensation related to such transactions. Such additional compensation will not be shared with KKR Credit Funds or Other Clients or KKR Credit Associates Vehicles. Also, Employees, in certain cases, are charged no (or reduced) management or incentive fees by the Stakes and Seeds Managers for their personal investments in Stakes and Seeds Funds. Cross Transactions and Agency Cross Transactions Under certain circumstances, KKR Credit from time to time arranges for purchases and sales of securities between two KKR Credit Funds and/or Other Clients (a “Cross Transaction”) (see also discussion of “Rebalancing Transactions” below). KKR Credit has adopted a specific cross-trading policy (“Cross Transactions Policy”) which is representative of any Investment Advisers Act requirements and complying with applicable law and additional governing documents, for the relevant KKR Credit Fund or Other Client. The Cross Transactions Policy establishes that a cross transaction can only be effected if appropriate and fair pricing is denoted and the cross transaction provides a clear benefit to each participating KKR Credit Fund or Other Client and further requires certain procedures are followed prior to the execution of the cross transaction. Cross transactions create conflicts of interest because, by not exposing buy and sell transactions to market forces, a KKR Credit Fund or Other Client might not receive the best price otherwise possible, or KKR Credit may have an incentive to improve the performance of one KKR Credit Fund or Other Client by selling underperforming assets to another KKR Credit Fund or Other Client, for example, to earn fees. KKR Credit will not arrange for a cross transaction to be implemented unless the requirements of the Cross Transaction Policy are fulfilled. KKR Credit from time to time engages in agency cross transactions between Other Clients and KKR Credit Funds and an unaffiliated third party in a manner consistent with the Advisers Act and the rules promulgated thereunder. In an agency cross transaction, KKR Credit or one of its affiliates including, in particular, an Affiliated Broker, earns a fee for arranging a transaction between KKR Credit Funds or Other Clients. The RIC and other regulated entities will generally not engage in cross transactions or agency cross transactions, except as permitted under the Investment Company Act and SEC guidance thereunder.

KKR proprietary entities from time to time acquire an asset of a portfolio company on terms negotiated with the management of the portfolio company. These transactions do not constitute principal transactions or cross trades that are subject to the restrictions and policies detailed above. To the extent that such transactions are appropriate investments for KKR Credit Funds or Other Clients as well as a KKR proprietary entity, KKR Credit will allocate such transactions in accordance with the procedures described in “Allocation of Investments” below.

Transactions Between KKR Credit Portfolio Companies

Portfolio companies of KKR Credit Funds or Other Clients from time to time will be counterparties to or participants in agreements, transactions or other arrangements with portfolio companies of another KKR Credit Fund or Other Client (for example, a portfolio company of one KKR Credit Fund or Other Client could engage a portfolio company of another KKR Credit Fund or Other Client to provide due diligence and special asset services). Agreements, transactions and other arrangements entered into between one KKR Credit Fund or Other Client portfolio company and another KKR Credit Fund or Other Client’s portfolio company will indirectly benefit KKR Credit by increasing the overall value of all investments at the expense of a one KKR Credit Funds or Other Client’s investment. Generally, transactions between portfolio companies of a KKR Credit Fund or Other Client and portfolio companies of another KKR Credit Fund or Other Client would not give rise to a conflict of interest as these transactions are typically negotiated between members of management of the portfolio companies that are independent of KKR Credit and without the participation of KKR Credit. However, KKR Credit’s interest in maximizing such overall investments give rise to a conflict of interest in particular, but not limited to, where KKR Credit has the ability through its investments to influence the activities of such companies or encourages KKR Credit Fund or Other Client portfolio companies to transact therewith. Where KKR Credit determines that there is a conflict of interest, including possibly because members of management are not sufficiently independent of KKR Credit, KKR Credit will take actions to resolve the conflict, in accordance with its established procedures and policies for addressing conflicts, including potentially having other independent parties approve the transaction. In addition, two or more portfolio companies in which a KKR Credit Fund and/or Other Client, KKR Credit proprietary vehicles and/or other persons (collectively, “Other Participants”) hold an interest from time to time will merge or otherwise enter into a business or asset combination transaction (such merged or combined companies, businesses or assets, the “Successor Company”). In such transactions, the KKR Credit Fund and such Other Participants could have varying or no interests in certain of such portfolio companies participating in the merger or combination. Following such merger or combination, the KKR Credit Fund and the Other Participants will exchange securities issued by their existing portfolio companies, as applicable, for or otherwise hold or receive, securities in the Successor Company. If any of the portfolio companies involved in any such merger or business or asset combination (or their relevant businesses or assets) are under or over valued in connection with the merger or combination, the KKR Credit Fund and or any of the Other Participants will receive too great or too small an interest in the Successor Company, which would adversely impact the KKR Credit Fund and/or Other Participants receiving too small an interest and could otherwise be viewed as causing an indirect transfer of value between the KKR Credit Fund and Other Participants. Notwithstanding such transfer of value, such merger or combination transactions generally will not constitute or otherwise be treated by the KKR Credit Fund or Other Participants as principal or cross transactions that are subject to the restrictions applicable to such transactions pursuant to the governing documents of KKR Credit Funds and Other Clients.

Rebalancing Transactions

Subject to certain terms and conditions, on occasion and to the extent permitted by law and specific KKR Credit policies, KKR Credit from time to time effects rebalancing transactions between a KKR Credit Fund or Other Client and one or more other KKR Credit Funds or Other Clients pursuing similar investments. In such case, a KKR Credit Fund or Other Client will, directly or indirectly, purchase a security held by another KKR Credit Fund or Other Client or will sell a security to another KKR Credit Fund or Other Client (each a “Rebalancing Client”). From time to time, one or more KKR Credit Funds or Other Clients commit to an investment before an allocation decision is made, and such commitments will be aggregated in an underlying pooled investment vehicle (a “Rebalancing Vehicle”) that rebalances the investment among such KKR Credit Funds or Other Clients after the allocation decision is made. KKR Credit will determine, in its sole discretion, whether a particular KKR Credit Fund or Other Client is a Rebalancing Client, provided that KKR Credit Funds and Other Clients invested in a Rebalancing Vehicle will be treated as Rebalancing Clients. KKR Credit will not undertake a rebalancing transaction with a Rebalancing Client if it determines, in its sole discretion that such a transaction is not in the best interests of the Rebalancing Clients involved. KKR Credit effects these transactions based on the then-current independent market price and consistent with valuation procedures established by KKR Credit. Neither KKR Credit nor any of its affiliates receive any compensation in connection with such rebalancing transactions. These rebalancing transactions generally will be effected without brokerage commissions being charged. To the extent that such transactions are viewed as principal transactions due to KKR Credit’s or its affiliates’ ownership interest in a particular KKR Credit Fund, KKR Credit will either not effect such transaction or comply with the requirements of Section 206(3) of the Advisers Act.

Participation of Affiliated Broker-Dealers in KKR Credit Fund or Other Client Transactions

As described in response to Item 10, KKR Credit is affiliated with several broker-dealers. As further noted, certain of these Affiliated Brokers (including their respective related lending vehicles) manage or otherwise participate in underwriting syndicates and/or selling groups with respect to securities and debt instruments issued by portfolio companies, holding companies and other controlled or non-controlled entities in or through which KKR Credit Funds or Other Clients invest (including securities that are senior or junior within the capital structure of those held by KKR Credit Funds or Other Clients) or otherwise be involved in the public or private placement of securities or debt instruments issued by KKR Credit Fund or Other Client portfolio companies and other controlled or non-controlling entities in or through which a KKR Credit Fund or Other Client invests. Affiliated Brokers also provide capital markets advisory services to portfolio companies of KKR Credit Funds or Other Clients portfolio companies and other controlled or non-controlling entities in or through which a KKR Credit Fund or Other Client invests, including in connection with mergers, acquisitions and restructurings; and will alone, or with other counterparties, which might include other KKR investment vehicles, third party banks or other unaffiliated finance providers, provide acquisition financing , loans and services to such entities in addition to financing provided through a KKR Credit Fund or Other Client’s investment. In addition, Affiliated Brokers arrange lines of credit for (i) portfolio companies and other controlled or non-controlled entities in or through which KKR Credit Funds or Other Clients invest; (ii) KKR Credit Funds; (iii) Other Clients; and (iv) other third parties. Affiliated Brokers (through their respective lending related vehicles) also provide loans and lines of credit to such entities. Affiliated Brokers, as a consequence of such activities hold positions in instruments and securities issued by a KKR Credit Fund’s or Other Client’s portfolio companies (or controlled or non- controlled entities through which they invest), including securities issued in different parts of the capital structure of such companies, and engage from time to time in transactions that are also appropriate investments for a KKR Credit Fund or Other Client. Subject to applicable law, Affiliated Brokers receive fees, including underwriting, placement, syndication and transaction fees, underwriting discounts, interest payments or other compensation including compensation that is payable in cash or securities and are not required to be shared with KKR Credit Funds or Other Clients. In certain circumstances, where an Affiliated Broker is participating in the above underwriting and financing transactions, does so as lead or sole arranger in which case it will be responsible for negotiating its customary fees with the company for services provided. In addition, certain KKR Credit Funds or Other Clients might not be able to participate or be limited in certain investments due to tax law or regulatory constraints or other conflicts that could exist due to the Affiliated Broker’s role in such transaction. Where an Affiliated Broker serves as underwriter with respect to a portfolio company’s securities, the relevant KKR Credit Fund, Other Client or portfolio company are, in certain circumstances, subject to a “lock-up” period following the offering under applicable regulations or agreements during which time its ability to sell any securities that it continues to hold is restricted. This affects such KKR Credit Fund’s or Other Client’s ability to dispose of such securities at an opportune time. KKR Credit has conflicts of interest policies and procedures in place, where transactions involving a KKR Credit Fund or Other Client and an Affiliated Broker or its respective lending vehicles are appropriately reviewed and reported to the KKR’s Global Conflicts Committee. In addition, KKR reviews such transactions to ensure that the requirements of Section 206(3) of the Advisers Act and Rule 206(3)-2 under the Advisers Act, as applicable, in respect of principal transactions between any KKR Credit Fund or Other Client and KKR Credit or its affiliates (including any Affiliated Broker) are complied with in the context of such transactions. Affiliated Brokers have access to confidential and/or material non-public information regarding KKR Credit Funds, Other Clients or their portfolio companies and, subject to applicable law and confidentiality agreements, use such information in connection with financing and other services provided by the Affiliated Brokers.

Affiliated Brokers also provide investment banking, advisory and other services to affiliated or unaffiliated corporations, financial sponsors, management or other persons. Such services could relate to transactions that could give rise to investment opportunities that are suitable for KKR Credit Funds or Other Clients. In such case, the Affiliated Broker’s particular client would typically require the Affiliated Broker to act exclusively on its behalf, thereby precluding KKR Credit Funds or Other Clients from participating in such investment opportunities. No Affiliated Broker would be obligated to decline any such engagements in order to make an investment opportunity available to KKR Credit Funds or Other Clients. In addition, Affiliated Broker could come into the possession of information through these new businesses that limits a KKR Credit Fund’s or Other Client’s ability to engage in potential transactions. Affiliated Brokers or KKR Credit investment vehicles will from time to time provide financing to a third party sponsor or its acquisition vehicle or to another company for the purposes of acquiring a portfolio company or an interest in a portfolio company from a KKR or other KKR Credit Fund or Other Client. Although not limited to such arrangements, this type of financing has, in certain circumstances, been provided through pre-arranged buyer financing packages arranged and offered by Affiliated Brokers or other KKR Credit investment vehicles to potential bidders for the relevant portfolio company or interest. KKR Credit may face conflicts of interest where any Affiliated Broker or such other KKR Credit investment vehicle provides such acquisition financing, in particular in respect of its incentives to select a bidder using such financing for the purposes of creating an investment opportunity for such Affiliated Brokers or other KKR Credit investment vehicle and, potentially, related arranging fees for KKR Credit affiliates. Any such financing arrangements will be subject to KKR Credit’s policies and procedures for addressing conflicts. Financial Interest in KKR Credit Fund, Portfolio Company or Other Client Transactions As described in Item 5 - Fees and Compensation, KKR Credit and its affiliates (including, in particular, KKR) receive monitoring fees, financial advisory fees, loan administrative agent fees, transaction fees, and other compensation for services provided to portfolio companies, holding companies and other entities in or through which a KKR Credit Fund or Other Client invests. Such parties also receive break-up fees and other compensation with respect to KKR Credit Fund or Other Client portfolio company investments (including unconsummated or terminated transactions). As noted above, such compensation is often shared with the relevant KKR Credit Funds or Other Clients, as described in their offering materials, documents and/or the governing documents.

KKR Credit also earns fees as a result of its subsidiaries’ providing loan servicing or asset leasing services to certain KKR Credit Funds or Other Clients that invest in loan participations or hard assets, which fees will generally not be shared with KKR Credit Funds or Other Clients, depending on the particular governing documents of a particular KKR Credit Fund or Other Client. In negotiating originated loans and certain other originated credit investments on behalf of KKR Credit Funds and or Other Clients, KKR Credit or its affiliates have the ability to negotiate the payment of arranging and other transaction related fees by the relevant counterparty to KKR Credit and its affiliates and/or an original issue discount (“OID”). In such circumstances, KKR Credit will face a conflict of interest to the extent that a portion of any arranging or transaction related fees payable to KKR Credit and its affiliates is retained by KKR Credit and its affiliates, whereas any OID provided by the relevant counterparty would solely benefit a KKR Credit Fund or Other Client. As noted above, such compensation sharing with the relevant KKR Credit Funds or Other Clients, is determined by the offering materials, disclosure documents and/or governing documents.

Certain portfolio companies of KKR proprietary investments, KKR Credit Funds or Other Clients are counterparties to or participants in agreements, transactions or other arrangements with the portfolio companies of a separate KKR Credit Fund or Other Client (for example a portfolio company of a KKR proprietary investment or KKR Credit Fund has retained a company in which another KKR Credit Fund has invested to provide loan administration or asset leasing services or products). Agreements, transactions and other arrangements entered into by portfolio companies of KKR proprietary investments, different KKR Credit Funds or Other Clients indirectly benefit KKR Credit, the relevant KKR Credit Fund or Other Client as an investor in such companies or adversely impact the other KKR Credit Fund or Other Client portfolio companies with which they do business. The interest of KKR, any KKR Credit Fund or Other Client in maximizing its return on certain such investments gives rise to a conflict of interest in particular, but not limited to, where KKR Credit, the KKR Credit Fund or Other Client has the ability through its investments to influence the activities of such companies or encourages portfolio companies of a KKR Credit proprietary investment, KKR Credit Fund or Other Client to transact therewith. Such portfolio companies will also in certain cases compete with a KKR Credit Fund’s or Other Client’s investments. For example, KKR Credit (through its proprietary investment activities) or a KKR Credit Fund is likely to invest in a company which competes with, is a customer of, or is a service provider or supplier to another KKR Credit Fund portfolio company. In providing advice and recommendations to, or with respect to such portfolio companies’ business dealings, KKR Credit, any KKR Credit Fund or Other Client are not obligated to and may not take into consideration the interests of the other relevant KKR Credit Fund or Other Client or their portfolio companies and other investments. Accordingly, these circumstances give rise to certain potential conflicts of interest. Certain portfolio companies of a KKR proprietary investment, KKR Credit Fund or Other Client has had or will have an economic incentive or will do something for commercial reasons that have adverse consequences for another KKR Credit Fund or Other Client or its portfolio company, such as seeking to expand its market share at the expense of the other KKR Credit Fund portfolio company, withdrawing business from the other KKR Credit Fund portfolio company in favor of another company, offering the same product or service at a lower price, increasing its own prices along with other enterprises in the industry, or commencing litigation against another KKR Credit Fund’s portfolio company. Certain KKR Credit Fund or Other Clients also obtain confidential information regarding its portfolio companies that it cannot act on or disclose to another KKR Credit Fund or Other Client or its portfolio companies due to confidentiality requirements or applicable law, though such action or disclosure might be in the latter’s interests. Accordingly, certain of such business dealings result in adverse consequences to such other KKR Credit Funds or Other Clients or their investments.

While KKR Credit Funds and Other Clients have only a limited ability pursuant to their applicable governing documents to invest in portfolio companies that are private equity, special situations or other equity investments of other KKR Credit Funds or Other Clients, such KKR Credit Funds and Other Clients are not restricted in their ability to provide financing to a sponsor, acquisition vehicle of a sponsor or another portfolio company for the purposes of acquiring another company that represents a private equity, special situations or other equity investment of another KKR Credit Fund or Other Client. In addition, certain KKR Credit Fund and Other Clients will not be limited in their ability to provide financing to a borrower, or to provide debt or equity financing to a third party which in turn will use such financing to provide financing to a borrower, for the purposes of refinancing an existing loan or other debt position in the relevant borrower held by another KKR Credit Fund or Other Client. To the extent such investment opportunities arise, KKR Credit will face actual or apparent conflicts of interest, in particular in respect of its incentives to facilitate a successful exit of any such investment by the relevant KKR Credit Fund or Other Client through financing provided directly or indirectly by another KKR Credit Fund or Other Client. In addition, KKR Credit Funds and Other Clients will not be restricted in their ability to refinance loans or other debt positions held by other KKR Credit Funds or Other Clients in a borrower prior to their stated maturity. Such prepayments results in KKR Credit Funds or Other Clients receiving a lower than anticipated yield on such investments which they will not recoup through the redeployment of the relevant investment proceeds or otherwise mitigate through any early repayment penalties negotiated with the relevant borrower. While not limited to such periods, debt refinancings are more likely to occur during periods of declining interest rates. To the extent that KKR Credit Funds and Other Clients reinvest the proceeds of a prepayment in these circumstances, they will likely receive a rate of interest that is lower than the rate on the debt positions that were prepaid as a result of the refinancing. In considering such refinancing opportunities, KKR faces actual or apparent conflicts of interest, in particular in respect of its incentives to source attractive refinancing opportunities for the benefit of Other KKR Credit Funds or Other Clients. The pricing and terms of any of the foregoing refinancing transactions will be established solely by KKR Credit and its affiliates without the involvement of an independent third party.

In addition, portfolio companies of KKR proprietary entities, KKR Credit Funds or Other Clients that provide financial services enter into agreements, transactions or other arrangements with KKR Credit, certain KKR proprietary entities, and Affiliated Brokers. For example, from time to time, investments originated by KKR Credit, certain KKR proprietary entities, or Affiliated Brokers are sold to, purchased from, or distributed by a portfolio company that provides financial services. Agreements, transactions, and other arrangements entered into by a portfolio company that provides financial services directly or indirectly benefit KKR Credit, KKR proprietary entities and Affiliated Brokers, or adversely impact the relevant KKR Credit Fund or Other Client with which they do business. The interest of KKR Credit, the KKR proprietary entities, or Affiliated Brokers in maximizing its return on such investments gives rise to a conflict of interest including, but not limited to, where KKR Credit, the KKR proprietary entity or Affiliated Broker have the ability to influence or control the activities of such portfolio companies that provide financial services. KKR Credit has established policies and procedures to address these conflicts, including policies and procedures designed to ensure that any fees paid to or received from such portfolio companies are negotiated at arms-length, and that any potential conflicts are disclosed. Certain KKR proprietary entities and Affiliated Brokers, on behalf of their proprietary and client accounts, make investments in minority or majority interests in companies, businesses or other investments which are counterparties to or participants in agreements, transactions or other arrangements with portfolio companies of, a KKR Credit Fund or Other Client. These include certain Platform Managers and Platform Arrangements, loan servicing and administrative services and proprietary platforms described in detail in Item 5. In addition, certain portfolio companies of a KKR Credit Fund are likely to retain companies in which KKR or KKR Credit has a proprietary interest to provide services or products (please see Service Providers below) or could acquire an asset from such company). KKR’s ownership (indirect) of KKR Capital Markets LLC (see Item 10) is another example. Certain agreements, transactions and other arrangements entered into by KKR Credit Fund or Other Client portfolio companies and any such companies indirectly benefit KKR Credit as an owner of such companies or adversely impact any KKR Credit Fund or Other Client portfolio companies with which they do business. KKR Credit’s interest in maximizing its return on such investments can give rise to a conflict of interest in particular, but not limited to, where KKR Credit has the ability through its investments to influence the activities of such companies or encourages KKR Credit Fund or Other Client portfolio companies to transact therewith. Transactions between companies in which KKR (or any of its affiliates or personnel) acquires such proprietary interests, on the one hand, and KKR Credit Funds or Other Clients or their respective portfolio companies, on the other, are generally not expected to constitute the types of transactions that will entitle such companies to fees or other compensation that will reduce management fees payable by the KKR Credit Fund or Other Client. For example, insurance brokerage fees or IT licensing fees payable by a KKR Credit Fund portfolio company to an affiliate of KKR Credit for related services of an affiliate of KKR Credit will not reduce management fees, but will benefit the KKR Credit affiliate. Similarly, fees paid to loan servicers, Platform Managers or Asset Servicers in which KKR Credit and its affiliates have an interest will not reduce management fees.

Certain KKR proprietary entities and Affiliated Brokers, on behalf of their proprietary and client accounts, are likely to make investments in companies, businesses or other investments that compete with a KKR Credit Fund’s or Other Client’s investments. For example, KKR Credit or its affiliates might invest in a company which competes with a KKR Credit Fund portfolio company. In providing advice and recommendations to, or with respect to such investments and in dealing in such investments on behalf of the relevant proprietary or client accounts, KKR Credit and its affiliates will not take into consideration the interests of the relevant KKR Credit Fund or Other Client or their portfolio companies and other investments. Accordingly, such advice, recommendations and dealings have the potential to result in adverse consequences to such KKR Credit Funds or Other Clients or their investments. Please also see to Item 10 - Other Financial Industry Activities and Affiliations for a discussion of services provided by Affiliated Brokers to Competitor Companies.

As noted in response to Item 5, Employees, Senior Advisors, Industry Advisors, KKR Advisors and RPM and other Consultants sometimes serve on the boards of KKR Credit Fund or Other Client portfolio companies and in such capacity currently and could in the future receive director’s fees, which might be retained in whole or in part by the relevant Employee, Senior Advisor, Industry Advisor, KKR Advisor, RPM or Other Consultant. Serving in such capacity gives rise to conflicts to the extent that an Employee’s fiduciary duties to a portfolio company as a director may conflict with the interests of KKR Credit Funds or Other Clients. As the KKR Credit Funds or Other Clients will generally be significant investors in such companies, it is expected that such interests will generally be aligned. Certain employees, Senior Advisors, Industry Advisors, KKR Advisors, RPM and other Consultants also serve as directors or interim executives, or otherwise be associated with, companies that are competitors of portfolio companies of certain KKR Credit Funds or Other Clients. It would be expected that the interests of a competitor company would often not be aligned with those of a KKR Credit Fund, Other Client or their portfolio company, and consistent with the fiduciary duty owed by Employees, RPM, Senior Advisors, Industry Advisors, KKR Advisors and other Consultants to such Competitor Companies when serving on their boards, they will act in the best interests of the Competitor Companies, and not in the best interests of KKR Credit Funds or Other Clients. Having KKR Credit Employees serve as directors or interim executives of a portfolio company of a KKR Credit Fund or Other client or another company (including a portfolio company of another KKR Credit Fund, Other Client or KKR proprietary entity) will, under certain circumstances, restrict the ability of a KKR Credit Fund to invest directly in an investment opportunity that also constitutes an investment opportunity for such company.

KKR Credit and its affiliates receive certain fees through third parties pursuant to participation or “back- to-back” arrangements (please see Item 5 – Non-Shared Fees). While KKR Credit and its affiliates believe that such fees and other compensation are reasonable and generally at market rates for the relevant activities, such compensation is generally determined through negotiations with related parties and not on an arm’s length basis. In connection with such arrangements, KKR Credit will make determinations of market rates based on its consideration of a number of factors, which are generally expected to include KKR Credit’s experience with non-affiliated service providers as well as benchmarking data and other methodologies determined by KKR Credit to be appropriate under the circumstances. While KKR Credit and its affiliates will generally seek to obtain benchmarking data regarding the rates charged or quoted by third parties for similar services, appropriate comparisons might not be available for a number of reasons, including for example, a lack of a substantial market of providers or users of such services or the confidential and/or bespoke nature of such services. Accordingly, any such market comparison efforts by KKR Credit could potentially result in inaccurate information regarding market terms for comparable services. Depending on the nature of the relevant services provided, expenses to obtain benchmarking data will be borne by the relevant portfolio company or directly by the KKR Credit Fund, Other Client and/or such other investment vehicles and accounts that invest.

As discussed below under KKR Credit Purchases/Sales of Securities Recommended to KKR Credit Funds or Other Clients, Employees and other persons associated with KKR Credit and executives of KKR Credit Fund portfolio companies are permitted to invest in KKR Credit Associates Vehicles established as co- investment vehicles to facilitate participation by such persons in portfolio investments made by KKR Credit Funds or Other Clients (which vehicles typically will not be charged management fees or carried interest allocations, performance fees or certain expenses). Employees and other persons associated with KKR Credit as well as KKR proprietary entities also are permitted to co-invest in “opportunistic” investments by the Balance Sheet (described below), which can also be made alongside KKR Credit Funds or Other Clients. Please see the Proprietary Investments and Balance Sheet Investments sections below for further information regarding such investments.

Certain KKR proprietary entities also make capital contributions to KKR Credit Funds and co-investments in portfolio companies. The Public Company indirectly holds limited partnership interests in a number of KKR Credit Funds and co-investments in portfolio companies, each of which it has transferred or sold and could in the future transfer or sell (in whole or in part), to third parties (including other investors in KKR Credit Funds) in negotiated transactions. Please see the Proprietary Investments and Balance Sheet Investments sections below for further information regarding such investments Certain KKR Credit Funds and Other Clients have in the past and could in the future sell a portfolio company interest to a limited partner of a KKR Credit Fund or Other Client, including a limited partner or Other Client already directly or indirectly holding an interest in the same portfolio company or a limited partner in another KKR Credit Fund or Other Client that is not invested in the portfolio company. Because such proposed sales are from KKR Credit Funds or Other Clients (and not KKR Credit) and to limited partners of KKR Credit Funds or Other Clients and not “clients” as defined under the Advisers Act, KKR does not consider such sale transactions to be principal transactions. KKR Credit has policies and procedures to manage conflicts of interest that arise in these circumstances.
Investments in which KKR Credit, KKR Credit Funds, Other Clients, and KKR and/or KKR Funds
Invest in Different Securities of the Same Issuer or Invest in the Same Issuer on Same or Different
Dates
Certain KKR Funds and KKR proprietary entities have, an investment focus that is, at least in part, similar to the focus of certain KKR Credit Funds, Other Clients and KKR Credit Associates Vehicles. In particular, certain KKR Credit Funds or Other Clients co-invest in private equity and other investments made by KKR Funds and KKR Funds are permitted to co-invest in KKR Credit investment strategies and other investments alongside KKR Credit Funds and Other Clients. The overlap of investment focus can be viewed as giving rise to certain conflicts of interest, including potential conflicts in allocating and managing certain investments, between clients of KKR Credit on the one hand and KKR Funds or Other Clients on the other hand.

Certain KKR Credit Funds, KKR Funds, KKR Credit Associates Vehicles and other KKR proprietary entities, Other Clients and KKR affiliates, including an Affiliated Broker, invests in different parts of the capital structure of the same portfolio company. For example, a KKR Credit Fund or a KKR Credit affiliate, including an Affiliated Broker, is permitted to invest in debt securities issued by a portfolio company in which a KKR Credit Fund or Other Client has a controlling or other equity interest or an Affiliated Broker have or in the future underwrite an offering of debt securities issued by a portfolio company that are more senior or junior to those held by a KKR Credit Fund or Other Client or a KKR Credit Fund or Other Client have or in the future hold preferred equity in a portfolio company in which another KKR Credit Fund or Other Client holds ordinary shares. The interests of the KKR Credit Fund and such KKR Fund or KKR Credit affiliate, including any Affiliated Broker, will not always be aligned, which may give rise to actual or potential conflicts of interest, or the appearance of such conflicts of interest. Certain actions taken for a KKR Credit Fund or Other Clients could be adverse to those taken for a KKR Fund, a KKR Credit affiliate, or vice versa and actions taken by an Affiliated Broker will be adverse to the interests of a KKR Credit Fund or Other Client, or vice versa. KKR and KKR Credit have policies and procedures to mitigate potential conflicts of interest involved in investments by such entities in different parts of a portfolio company’s capital structure and take certain actions that, in the absence of a potential conflict, it would not take, such as (i) abstaining from exercising voting or other rights with respect to an investment in a certain debt or equity security class of a portfolio company; (ii) remaining passive in a restructuring or similar situations (including electing not to vote or voting pro rata with other security holders; (iii) investing in the same or similar classes of securities as other accounts that have existing accounts to create alignment of interests; or (iv) otherwise taking an action designed to mitigate or eliminate the conflict.

Additionally, the investment programs employed by KKR Credit, KKR for KKR Funds or KKR proprietary entities, as applicable, will conflict from time to time with the transactions and strategies employed by KKR Credit in managing KKR Credit Funds and Other Clients (or, as applicable, other KKR Credit Funds or Other Clients). For example, where a KKR Credit Fund, Other Client, KKR Fund or KKR proprietary entities including Seed Investments, hold portfolio investments in the same issuer, their interests will in many cases be in conflict irrespective of whether their investments are at different levels of the capital structure. In addition, in certain cases, KKR Credit and KKR gives advice or take action (including entering into short sales, derivative transactions or other “opposite way trading” activities) with respect to the investments held by, and transactions of, certain KKR Credit Funds, Other Clients, KKR Funds or KKR proprietary entities that are different from, or otherwise inconsistent with, the advice given or timing or nature of any action taken with respect to the investments held by, and transactions of, KKR Credit Funds or Other Clients (or, as applicable, other KKR Credit Funds or Other Clients). In certain cases, such advice and actions will adversely impact a KKR Credit Fund or Other Client. The timing of entry into or exit from a portfolio investment will, in certain cases, vary as among KKR Credit Funds, Other Clients, KKR Funds and KKR proprietary entities for reasons such as differences in strategy, existing portfolio or liquidity needs. Similarly, the form of consideration received in connection with an exit of an investment will also vary among these parties if, for example, KKR proprietary entities were to receive and retain an in-kind distribution of securities, for example, through an in-kind distribution by a KKR Credit Fund, Other Client or KKR Credit Fund to its general partner, where such securities are otherwise disposed of by such KKR Credit Fund, Other Client or KKR Fund for cash, in whole or in part. These variations or lack of variation that may be imposed by the general partner in timing or the form of consideration will, in certain cases be detrimental to another KKR Credit Fund or Other Client or any such other investing entities. There can be no assurance that the terms of, or the return on, such KKR Credit Fund’s or Other Client’s investment will be equivalent to, or better than, the terms of, or the returns obtained by, a different KKR Credit Fund or Other Client, or a KKR Fund or KKR proprietary entity, including in respect of any category of investments, nor can there be any assurance that a different KKR Credit Fund or Other Client, or a KKR Fund or KKR proprietary entity with similar investment objectives, programs or strategies, including, without limitation, any Seed Investments, will hold the same positions, obtain the same financing or perform in a substantially similar manner as such KKR Credit Fund or Other Client.

Different advice and/or inconsistent actions is motivated by variety of reasons, including, without limitation, the differences between the investment objective, program, strategy or tax treatment of certain KKR Credit Funds or Other Clients, KKR Funds or KKR proprietary entities on the one hand and different KKR Credit Funds or Other Clients on the other, the regulatory status of certain KKR Credit Funds or Other Clients, KKR Funds and any related restrictions or obligations imposed on KKR Credit (or any affiliate) as a fiduciary thereof (including, for example, certain KKR Credit Funds or Other Clients or KKR Funds that are registered as investment companies under the Investment Company Act). For example, while one KKR Credit Fund engages in bona fide hedging transactions, in KKR proprietary entities enter into such transactions for speculative purposes or, alternatively, stet hedge a given risk related to a given investment more or less fully than such KKR Credit Fund. Certain KKR proprietary entities enter into such hedging arrangements in connection with investments alongside a KKR Credit Fund and, like other investors in such KKR Credit Fund, also enter into hedging arrangements in connection with their investments made through such KKR Credit Fund (including with respect to the applicable KKR Credit GP’s entitlement to receive carried interest distributions), which arrangements are not employed by such KKR Credit Fund itself. These differences in hedging strategy could result in such KKR proprietary entities achieving more or less favorable returns with respect to an investment relative to the returns achieved by the KKR Credit Fund or Other Client or other investors in the KKR Credit Fund or Other Client. In the future, certain KKR Credit Funds or Other Clients, KKR Funds or a KKR proprietary entity concurrently, or in close proximity in time with such acquisition by a different KKR Credit Fund or Other Client, establish a short position in a security acquired by such KKR Fund or Other Client (for example as collateral) or that otherwise relates to such an investment held by such KKR Credit Fund or Other Client and such short sale will result in a decrease in the price of the security acquired by or otherwise held by such KKR Credit Fund or Other Client or otherwise benefit the execution of the transaction entered into by another KKR Credit Fund or Other Client, or a KKR Fund and/or KKR proprietary entity. With respect to portfolio companies of KKR Credit Funds, Other Clients or KKR proprietary entities that are private equity investments of KKR and/or KKR Funds (if any), such KKR Funds and/or KKR will seek to acquire controlling or other significant influence positions and will also seek to make some investments in which they do not acquire control or significant influence. KKR Funds or Other Clients will frequently have the ability to elect some or all of the members of the board of directors of their portfolio companies and thereby control their policies and operations, including the appointment of management, future issuances of common stock, or other securities, the payments of dividends, if any, on their common stock, the incurrence of debt, amendments to their certificates of incorporation and bylaws, and entering into extraordinary transactions. Certain actions of a portfolio company that KKR is in a position to control or influence either directly by reason of a KKR Fund’s, Other Client’s or KKR proprietary entity’s interest in such company will be in the interests of the KKR Fund or Other Client or KKR proprietary entity but adverse to the interests of a KKR Credit Fund or Other Client, or vice versa. For example, a KKR Fund or KKR proprietary entity could have an interest in pursuing an acquisition that would increase indebtedness, a divestiture of revenue-generating assets, or another transaction that, in KKR’s judgment, could enhance the value of the KKR Fund’s investment, but would subject debt investments made by a KKR Credit Fund to additional or increased risk.

In addition, to the extent that a KKR Fund, Other Client or KKR proprietary entity is the controlling shareholder of a portfolio company of a KKR Credit Fund or Other Client, KKR or a KKR affiliate is likely to have the ability to determine (or significantly influence) the outcome of all matters requiring stockholder approval and to cause or prevent a change of control of such company or a change in the composition of its board of directors and could preclude any unsolicited acquisition of that company. A KKR Fund, Other Client or KKR proprietary entity interests with respect to the management, investment decisions, or operations of a portfolio company will at times be in direct conflict with those of KKR Credit Funds or Other Clients that do not have the same level of control or influence over the company. As a result, KKR Credit faces actual or apparent conflicts of interest, in particular in exercising powers of control over such portfolio company.

KKR Credit’s ability to implement any KKR Credit Fund’s or Other Client’s strategy effectively will also be limited to the extent that contractual obligations entered into in respect of investments made by a different KKR Credit Fund or Other Client, a KKR Fund or a KKR proprietary entity. Limitations on strategy implementation also result from regulatory obligations or restrictions imposed on KKR Credit as a result of the regulatory status of KKR proprietary entities and/or different KKR Credit Funds or Other Clients, or a KKR Fund (for example, under ERISA or the Investment Company Act), including restrictions on the ability of any KKR Credit Fund or Other Client (or KKR Credit on their behalf) to invest in securities or interests that such KKR Credit Fund or Other Client are otherwise interested in pursuing or to otherwise take actions in respect of such KKR Credit Fund’s or Other Client’s investments that are beneficial to such KKR Credit Fund or Other Client. For example, in certain instances in connection with the sale of investments by KKR proprietary entities or KKR Credit Funds and Other Clients, KKR Credit enters into agreements prohibiting KKR Credit Funds, Other Client and KKR proprietary entities from engaging in activities that are deemed to compete with the disposed of investment for a certain period of time. Such agreements prevent KKR Credit Funds or Other Clients from acquiring investments in certain sectors or regions, including investments that otherwise would have been appropriate for KKR Credit Funds or Other Clients.

KKR Credit Funds or Other Clients can also participate in re-leveraging and recapitalization transactions involving issuers of their portfolio investments in which other KKR Credit Funds or Other Clients or KKR Funds have invested or will invest please register to get more info

Selecting or Recommending Broker-Dealers

To the extent required by applicable law, it is KKR Credit’s policy to seek to obtain best execution of trades (if any) in public equity and debt securities and other marketable securities traded on behalf of the KKR Credit Funds and Other Clients by a selected broker-dealer. In seeking best execution, the determinative factor is not always the lowest possible per security price or commission but whether, in KKR Credit’s view, the transaction represents the best overall qualitative and quantitative execution for the KKR Credit Fund or Other Client. KKR Credit’s process of determining best execution involves not only an assessment of brokerage commissions or bid/offer spreads, but also an evaluation of broker-dealer ancillary services. KKR Credit generally considers a range of a broker-dealer’s services in assessing best execution, including: o competitiveness of commission rates and spreads; o promptness of execution; o past history in executing orders; o clearance and settlement capabilities; o research capabilities and quality; o access to markets, investments (including access to new issues) and distribution network; o whether the broker-dealer is making a market in a particular issuer; o trade error rate and ability or willingness to correct errors; o anonymity/confidentiality; o market impact; o liquidity; o speed of execution; o expertise with complex transactions; o trading style and strategy; and o geographic location. Although KKR Credit will seek competitive commissions and spreads, it will not necessarily obtain the lowest possible rates for portfolio transactions. The commissions, spreads or other transaction or financial advisory fees charged by an executing broker-dealer will be higher or lower than those charged by other broker-dealers. On a quarterly basis, KKR Credit’s Trade Review Committee conducts an evaluation of the qualitative and quantitative factors surrounding the execution quality of its counterparties.

As noted above in Item 10, the Affiliated Brokers do not execute transactions on behalf of KKR Credit Funds and Other Clients. In addition, such Affiliated Brokers do not maintain client accounts. Research and Other Soft Dollar Benefits

Pursuant to KKR Credit’s policy, it does not enter into soft dollar or comparable commission sharing arrangements with broker-dealers relating to transactions executed for the benefit of KKR Credit Funds or Other Clients, despite the incentive to receive research or other products or services without paying. It should be noted, however, that various broker-dealers provide KKR Credit or its affiliates with proprietary research and other products and services, which KKR Credit, in certain cases, uses to service all KKR Credit Funds or Other Clients. KKR Credit is of the view that it would receive such research, products and services regardless of the volume of transactions executed through such broker-dealers or the level of commissions or spreads generated by such transactions and that, accordingly, it is not causing any KKR Credit Fund and Other Client to “pay up” for such research, services or products and such research, products and services are not a factor considered by KKR Credit in directing client transactions to such broker- dealers. KKR Credit does not cause KKR Credit Funds or Other Clients to pay commissions higher than those charged by other broker-dealers in return for soft-dollar benefits or direct client transactions to a particular broker-dealer in return for soft dollar benefits. Acquisitions of portfolio companies will typically be executed by KKR Credit on behalf of KKR Credit Funds or Other Clients on terms specifically negotiated by KKR Credit with such companies or the seller of such companies.

In certain jurisdictions, such as the United Kingdom and Ireland, KKR Credit’s locally-regulated affiliates will be required to pay for research services they consume in order to comply with MiFID II standards as implemented by the relevant local financial services regulator. The purpose of the MiFID II standards regarding research consumption is to ensure there is a clear delineation between commissions paid for trading services and the provision of research. KKR Credit is of the view that this aligns with KKR Credit’s approach to soft dollar arrangements discussed above as it ensures that the provision of research is not a consideration when deciding where to direct client transactions. Brokerage for Client Referrals KKR Credit engages broker-dealers or affiliates of broker-dealers with whom it engages in securities transactions on behalf of KKR Credit Funds and Other Clients to place securities issued by KKR Credit Funds. Similarly, such entities will be underwriters of, or otherwise involved in the placement of securities issued by KKR Credit or KKR Credit portfolio companies. In addition, KKR has partnered with Deutsche Bank AG (“DB”) in the establishment of KKR Master Index Fund L.P., which is distributed by DB (and KKR Credit will effect securities transactions through DB or its affiliates). The foregoing relationships with broker-dealers and their affiliates give rise to a conflict of interest to the extent that such relationships could be viewed as influencing KKR Credit’s selection of broker dealers and other trading counterparties. KKR Credit, however, takes into account a number of factors in attempting to satisfy its fiduciary obligation to seek best execution for its clients’ securities transactions. Directed Brokerage KKR Credit does not recommend, request or require that a client direct KKR Credit to execute transactions through a specified broker-dealer. Aggregation of Client Orders (Bunched Trades)

In order to minimize execution costs and obtain best execution for KKR Credit Fund and Other Client transactions in marketable securities, KKR Credit bunch orders for KKR Credit Funds and Other Clients (subject to KKR Credit’s obligation to seek best execution for KKR Credit Funds and Other Clients and otherwise treat KKR Credit Funds and Other Clients in a fair and equitable manner over time). Allocations of bunched trades are made consistent with KKR Credit’s allocation policies and procedures described above in Item 11. please register to get more info

KKR Credit has an internal structure which allocates responsibility for oversight of KKR Credit Fund and Other Client portfolios and/or specific KKR Credit Fund or Other Client portfolio investments to the respective KKR Credit investment committees and/or executive investment management, and for certain Other Clients, as it relates to strategic investment oversight, to appropriate senior investment professionals. Generally, investments of KKR Credit Funds and Other Clients are overseen by established investment committees, which primarily consist of representation by portfolio management, KKR Credit senior investment professionals, and for certain credit strategies, trading. Additionally, certain KKR Credit Portfolio Managers oversee the investment process for Other Clients investing in certain strategies. Please see Item 16 - Investment Discretion for additional information regarding Investment Discretion with respect to Other Clients.

KKR Credit Fund and Other Client portfolios and their respective investments are reviewed and monitored with respect to historic and anticipated performance, market developments and compliance with the investment mandate of the relevant KKR Credit Fund or Other Client on an ongoing basis, both informally and formally through scheduled periodic meetings of the investment committees or established portfolio monitoring governance structure, as appropriate.

The nature and frequency of regular reports to KKR Credit Funds and Other Clients and to investors in KKR Credit Funds and Other Clients depends on the terms of the governing documents of such KKR Credit Funds and Other Clients and/or the requirements of any exchange or market on which their securities are admitted to trade or the relevant management agreement. Typically investors in KKR Credit Funds are provided with written quarterly unaudited financial reports and annual audited financial statements. please register to get more info

Economic Benefits from Non-Clients
As described in more detail under Item 5 and Item 10, Employees, Affiliated Brokers, KKR Capstone other KKR proprietary entities and RPM and other Consultants receive economic benefits from portfolio companies of KKR Credit Funds and Other Clients. Please see Item 5 - Fees and Compensation with respect to monitoring fees, financial advisory fees, transaction fees, accelerated fees, break-up fees and other compensation. Please see Item 5 - Fees and Compensation with respect to directors’ fees for Employees serving on boards of portfolio companies.

Please see Item 5 - Fees and Compensation and Item 10 - Other Financial Industry Activities and Affiliations with respect to compensation received by Affiliated Brokers.

Please see Item 5 - Fees and Compensation with respect to portfolio companies of KKR Credit Funds or Other Clients and fees and/or servicing payments payable to KKR, its affiliates or RPM (or other Consultants).

Compensation to Non-Supervised Persons for Client Referrals

KKR Credit enters into solicitation agreements pursuant to which it compensates a third-party intermediary for client referrals that result in the provision of investment advisory services by KKR Credit. KKR Credit will disclose these solicitation arrangements to affected investors, and any cash solicitation agreements will comply with Rule 206(4)-3 under the Advisers Act. Solicitors introducing clients to KKR Credit receive compensation from KKR Credit, such as a retainer and/or a percentage of introduced capital. Such compensation will be paid pursuant to a written agreement with the solicitor and generally is terminable by either party from time to time. The cost of any such fees will be borne entirely by KKR Credit or KKR and not by any affected client. please register to get more info

KKR Credit has custody of the assets of certain KKR Credit Funds and KKR Credit Associates Vehicles, and these KKR Credit Funds and their investors receive annual audited financial statements from the KKR Credit Funds’ auditor. Other KKR Credit Funds and Other Clients of KKR Credit receive account statements from broker-dealers, banks or other qualified custodians with respect to the assets managed by KKR Credit. KKR Credit sends certain account and performance information to KKR Credit Funds and Other Clients, and KKR Credit urges the KKR Credit Funds and Other Clients to compare the information they receive from KKR Credit with the information received from KKR Credit Fund auditors or broker- dealers, banks or other qualified custodians. please register to get more info

KKR Credit, including through the KKR Credit GPs, generally has discretionary authority based on its investment management agreements with each KKR Credit Fund or Other Client and the governing documents of the KKR Credit Funds and Other Clients to buy and sell securities or other investments on behalf of the KKR Credit Funds and Other Clients and to determine the amount of such investments to be bought and sold. The terms upon which KKR Credit serves as investment manager of a KKR Credit Fund are established at the time each KKR Credit Fund is established and are generally set out in the governing documents entered into by KKR Credit with respect to the relevant KKR Credit Fund, and disclosed in the offering or disclosure documents for the relevant KKR Credit Fund, as applicable. These terms, which vary as among each KKR Credit Fund, potentially restrict KKR Credit’s advice concerning investment in certain securities or types of securities, geographies, and leverage. Typically, the governing documents of the KKR Credit Funds contain limited investment restrictions and requirements as to diversification of fund investments, either by geographic region or asset type. For Other Clients and certain other investment vehicles established for a single investor, KKR Credit would negotiate the level of investment discretion with the client at the outset of the advisory relationship. In addition to the conflicts of interest described under Item 11, as a general matter, KKR Credit will, in certain cases, exercise its investment discretion to give advice or take action (including entering into short sales or other “opposite way trading” activities) with respect to the investments held by, and transactions of KKR Credit Funds, Other Clients or KKR proprietary entities that is different from or otherwise inconsistent with the advice given or timing or nature of any action taken with respect to the investments held by, and transactions of, other KKR Credit Funds, Other Clients or KKR proprietary entities. Such different advice and/or inconsistent actions will be due to a variety of reasons, including, without limitation, differences between the investment objectives, programs, strategies and tax treatment of certain KKR Credit Funds, Other Clients or KKR proprietary entities or the regulatory status of other KKR Credit Funds or Other Clients and any related restrictions or obligations imposed on KKR Credit as a fiduciary thereof (including for example KKR Credit Funds or Other Clients that are registered as investment companies under the Investment Company Act). Such advice and actions will, in certain cases, adversely impact KKR Credit Funds and Other Clients. For example, another KKR Credit Fund, Other Client, Seed Investment or other KKR proprietary entity establishes a short position in a security held by a KKR Credit Fund, Other Client, Seed Investment or other KKR proprietary entity (for example as collateral) and such short sale results in a decrease in the price of the security that the relevant KKR Credit Fund, Other Client, Seed Investment or other KKR proprietary entity hold. Similarly, KKR Credit seeks to buy or sell a security for a KKR Credit Fund or Other Client and, concurrently or in close proximity in time, seek to buy or sell the same securities or similar securities in the opposite direction; this can benefit the execution quality of the second account to execute such a trade. KKR Credit has established policies and procedures intended to address conflicts of interest inherent in effecting long and short positions in the same security (i.e., opposite way trading) with respect to KKR Credit Funds, Other Clients, Seed Investments and other propriety accounts. These policies and procedures are designed to ensure that KKR Credit will treat all accounts (including Seed Investments and other KKR proprietary entities) on equal footing and not favor long trading or short trading, or short trading over long trading; and also ensure that opposite way trading is the result of independent investment theses and is executed in an orderly and equitable fashion. please register to get more info

In accordance with Rule 206(4)-6 under the Advisers Act, KKR Credit has adopted policies with respect to voting Client securities, and has engaged an independent third party proxy voting specialist, Institutional Shareholder Services, Inc. (“ISS”), to assist KKR Credit in the proxy voting process. The services provided by ISS include research and voting recommendations as well as ballot notifications, execution, reporting and recordkeeping with respect to both U.S. and non-U.S. securities of publicly traded companies. KKR Credit has engaged ISS to assist with its proxy voting, however, KKR Credit, retains ultimate voting discretion with respect to KKR Credit Fund or Other Client securities. It is the general policy of KKR Credit to vote proxies in the best interest of its’ Clients. KKR Credit will, in certain cases, either depart from an ISS recommendation in order to avoid voting decisions believed to be contrary to the best interests of KKR Credit Funds and Other Clients, or even choose not to vote proxies in certain situations. Any such exceptions will be documented by KKR Credit Compliance. KKR Credit recognizes that in certain cases there will also be a potential conflict of interest in voting proxies due to business or personal relationships it maintains with persons having an interest in the outcome of certain votes. KKR Credit has adopted policies to address these and other issues that could give rise to a conflict, including referring the matter to the KKR Credit Conflicts Committee. Appropriate documentation to support its proxy voting position on such proxy matters will be maintained. A KKR Credit Fund or Other Client or investor in a KKR Credit Fund can obtain a copy of KKR Credit’s Proxy Voting policies and procedures and information on how KKR Credit voted proxies on behalf of such party on written request to KKR Credit. please register to get more info

KKR Credit does not require the payment of management fees or other compensation six months or more in advance. There exists no financial condition of which KKR Credit is currently aware that would impair KKR Credit’s ability to meet contractual commitments to its Clients.
Item 19 Requirements for State-Registered Advisers
KKR Credit is not registering, nor is currently registered, as an investment adviser with any state securities authorities. please register to get more info