SCHEDULE: Cliffwater Reduces KKR FS Income Trust Stake to 4.5%

Cliffwater Corporate Lending Fund and affiliates have reduced their beneficial ownership in KKR FS Income Trust to 4.5% as of September 30, 2025.

Summary

• Cliffwater Corporate Lending Fund, Cliffwater LLC, and Stephen Nesbitt (collectively, "Reporting Persons") beneficially own 2,091,712.10 Common Shares of Beneficial Interest in KKR FS Income Trust.
• This ownership represents 4.5% of the outstanding class of securities, based on 47,002,485 shares outstanding as of September 30, 2025.
• The Reporting Persons hold shared voting and shared dispositive power over all 2,091,712.10 shares.
• Cliffwater Corporate Lending Fund has explicitly waived voting rights in excess of 4.99%.
• This document is Amendment No. 2 to a Schedule 13G, indicating a change from a previously reported beneficial ownership position.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the reduction in a significant investor's stake below the 5% threshold, which could be interpreted as a lack of conviction or a strategic divestment. However, it's not a strong negative as it's a passive investment and the reduction is not drastic.

Negatives

• The reduction in beneficial ownership below the 5% threshold could be interpreted as a slight negative signal, as a significant investor has decreased their stake.

Future Outlook

NA

Industry Context

Schedule 13G filings are routine disclosures by passive investors who acquire more than 5% of a company's stock, or amendments when their stake changes. This amendment indicates that Cliffwater Corporate Lending Fund and its affiliates now hold 4.5% of KKR FS Income Trust, placing them below the 5% threshold that typically triggers initial 13G filings. The waiver of voting rights above 4.99% reinforces their passive investment intent. A reduction below 5% often means the investor is no longer required to file a 13D (for active investors) and can continue with a 13G, or simply that their stake has decreased.

Stakeholder Impact

• Shareholders: May view the reduction in a significant investor's stake as a slight negative signal, potentially impacting investor confidence.
• Management: May need to understand the reasons behind the reduction in stake by a notable institutional investor.

Key Dates

Recommendation

The filing indicates a reduction in a significant investor's stake below the 5% threshold. While not a drastic sell-off, it suggests a decreased conviction or a rebalancing by Cliffwater. For existing investors, this might warrant a "hold" as they assess if other fundamental factors support their investment, while new investors might exercise caution. It's not a strong sell unless there are other negative indicators, nor a buy as the news is not positive.

Keywords

KKR FS Income Trust, Cliffwater Corporate Lending Fund, Cliffwater LLC, Stephen Nesbitt, Schedule 13G, beneficial ownership, investment adviser, common shares, equity stake