FS KKR Capital Corp. operates as an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company (BDC). The firm's primary business model revolves around providing direct lending and customized credit solutions to private upper middle-market companies in the United States. Its investment portfolio is heavily concentrated in senior secured loans, second-lien secured loans, and, to a lesser extent, subordinated debt, mezzanine financing, and asset-based financing loans. The company generates revenue primarily through interest income on its debt investments, as well as dividend income and fees associated with its financing arrangements.
Geographically, FS KKR Capital Corp. focuses its investments within the United States. The company benefits from its external management structure, being advised by FS/KKR Advisor, LLC, which is a joint venture between alternative asset manager FS Investments and KKR Credit, a subsidiary of the global investment firm KKR & Co. This relationship provides FS KKR Capital Corp. with significant competitive advantages, including access to KKR's extensive deal sourcing network, underwriting capabilities, and risk management platform. The company's portfolio spans a diverse range of industries, including software, healthcare, commercial services, and capital goods, allowing it to mitigate sector-specific risks while delivering strong risk-adjusted returns and consistent dividend yields to its shareholders.
