HedgeCo.Net — KKR FS Income Trust Select, the nontraded business development company known as K-FITS, will repurchase all shares tendered in its third-quarter offer even though requests slightly exceeded its 5% quarterly limit, according to a shareholder letter filed with the SEC on October 5, 2026 and reported by Private Equity Wire on October 6. Investors asked to redeem approximately 5.06% of outstanding shares in the offer, which expired on September 29.
The fund said that because requests only modestly exceeded the offer amount, and in light of its available liquidity, it would buy back 100% of shares properly tendered and not withdrawn, using prior authorization from its board rather than changing the terms of the offer. K-FITS, which invests in direct lending and asset-based finance, reported an annualized inception-to-date net return of 8.64% since it began operating in February 2024. Its sister vehicle, KKR FS Income Trust, saw much lighter demand, with accepted repurchases equal to about 1.5% of shares, and is also satisfying all requests.
The decision lands against a backdrop of elevated but easing withdrawal pressure across semi-liquid private credit. Across the 19 NAV BDCs that had reported third-quarter tender results, redemption requests totaled $13.8 billion, or 11.5% of estimated tender offer NAV, down from 12.7% on a same-store basis in the second quarter, according to Robert A. Stanger & Co. Sponsors fulfilled roughly 40% of requests, leaving about $8.2 billion unmet. Requests at Blue Owl Technology Income Corp. reached 39.0% of shares, while Blue Owl Credit Income Corp. eased to 16.8%.
The contrast is instructive. For funds facing requests well above their caps, the payout ratio is essentially arithmetic, the cap divided by the request rate, and boards’ only real lever is whether to widen the cap. K-FITS sits at the other end of the spectrum: with demand barely above the limit, honoring every request costs little and reinforces investor confidence, which can itself dampen future redemption pressure. The choice to pay out in full is a reputational decision as much as a liquidity one.
For advisors and allocators using nontraded BDCs, the quarter’s data suggest the redemption wave may have peaked, though Stanger itself cautioned that one quarter does not establish a trend. The more durable lesson is that liquidity terms behave very differently fund by fund. Investors should look past headline caps to request rates, available liquidity and leverage, and to how each sponsor has used board discretion in prior quarters, when assessing how readily they could exit if conditions tighten again.