XML 23 R12.htm IDEA: XBRL DOCUMENT v3.24.1.1.u2
Related Party Transactions
 3 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
Management Agreement

On September 25, 2023, the Company entered into an Amended and Restated Management Agreement with the Manager (the “Management Agreement”). Pursuant to the Management Agreement, the Manager is responsible for sourcing, evaluating and monitoring the Company’s acquisition opportunities and making recommendations to the Company’s executive committee related to the acquisition, management, financing and disposition of the Company’s assets, in accordance with the Company’s objectives, guidelines, policies and limitations, subject to oversight by the Board.

Pursuant to the Management Agreement, the Manager is entitled to receive a management fee (the “Management Fee”) from the Company in an amount equal to (i) 1.25% per annum of the month-end NAV attributable to Class D Shares, Class I Shares and Class S Shares, (ii) 1.00% per annum of the month-end NAV for a 60-month period following June 1, 2023 (the “Initial Offering”) attributable to Class U Shares, Class R-D Shares, Class R-S Shares and Class R Shares (provided, in the case of Class U Shares, Class R-S Shares and Class R Shares, that such Class U Shares, Class R-S Shares and Class R Shares are purchased by an investor as part of an intermediary’s aggregate subscription for at least $100,000 during the 12-month period following the Initial Offering) and 1.25% per annum of the month-end NAV attributable to Class U Shares, Class R-D Shares, Class R-S Shares and Class R Shares thereafter, each before giving effect to any accruals for certain fees and expenses. Such Management Fee is calculated based on the Company’s transactional net asset value, which is used to determine the price at which the Company sells and repurchases its Shares.

KKR or its affiliates (and in the case of directors’ fees, KKR executives) are expected to be paid transaction fees and monitoring fees in connection with the acquisition, ownership, control and exit of Infrastructure Assets, and KKR or its affiliates are expected to be entitled to receive “break-up” or similar fees in connection with unconsummated transactions (“Other Fees”). The Management Fee payable in any monthly period is subject to reduction, but not below zero, by an amount equal to any Other Fees allocable to Investor Shares pursuant to the terms of the Management Agreement. The Manager, in its sole discretion, may forgo reimbursement by the Company of certain expenses incurred by the Manager or its affiliates (other than the Company and its subsidiaries) on behalf of the Company in each calendar month to the extent there remains any Other Fees that are not used to offset the Management Fee. Any Other Fees used to offset such expenses will not be applied again to offset future Management Fees.

For the three months ended March 31, 2024, the Manager earned $3,767 in gross Management Fees, which were offset by $3,767, resulting in zero net Management Fees. As of March 31, 2024 and December 31, 2023, there were unapplied credits of $3,158 and $6,533, respectively, to be carried forward that relate to Other Fees earned.

As of March 31, 2024 and December 31, 2023, the Company does not owe a net Management Fee to the Manager. Pursuant to the Management Agreement, such amounts earned may be offset by the Manager against amounts due to the Company from the Manager.

Performance Participation Allocation

Under the LLC Agreement, for as long as the Management Agreement has not been terminated, the Class H Members may receive a Performance Participation Allocation from the Company. The Class H Member is an affiliate of KKR.

KKR is allocated a “Performance Participation Allocation” equal to 12.5% of the Total Return attributable to Investor Shares subject to the annual Hurdle Amount and a High Water Mark, with a 100% Catch-Up (each as defined in the LLC Agreement). Such allocation will be measured and allocated or paid annually (excluding the initial Reference Period, as defined in the LLC Agreement) and accrued monthly (subject to pro-rating for partial periods). KKR may elect to receive the Performance Participation Allocation in cash and/or Class F Shares. Specifically, promptly following the end of each Reference Period (and at other times as described below), KKR is allocated a Performance Participation Allocation in an amount equal to:

•First, if the Total Return for the applicable period exceeds the sum of (i) the Hurdle Amount for that period and (ii) the Loss Carryforward Amount (any such excess, “Excess Profits”), 100% of such Excess Profits until the total amount allocated to KKR equals 12.5% of the sum of (x) the Hurdle Amount for that period and (y) any amount allocated to KKR pursuant to this clause (any such amount, the “Catch-Up”); and

•Second, to the extent there are remaining Excess Profits, 12.5% of such remaining Excess Profits.
KKR will also be allocated a Performance Participation Allocation with respect to all Investor Shares that are repurchased in connection with repurchases of Shares in an amount calculated as described above with the relevant period being the portion of the “Reference Period” (which is the applicable year beginning on October 1 and ending on September 30 of the next succeeding year, with the initial Reference Period being the period from June 1, 2023 to September 30, 2024) for which such Shares were outstanding, and proceeds for any such Share repurchases will be reduced by the amount of any such Performance Participation Allocation. Such Performance Participation Allocation is calculated based on the Company’s transactional net asset value, which is used to determine the price at which the Company sells and repurchases its Shares.

If the Performance Participation Allocation is paid in Class F Shares, such Shares may be repurchased at KKR’s request and will be subject to the repurchase limitations of our share repurchase plan.

A Performance Participation Allocation accrual of $12,412 and $8,335 was recorded as of March 31, 2024 and December 31, 2023 in the Consolidated Statements of Assets and Liabilities. The Consolidated Statements of Operations reflect a $4,077 Performance Participation Allocation for the three months ended March 31, 2024.

Dealer-Manager Agreement

On September 25, 2023, the Company entered into an Amended and Restated Dealer-Manager Agreement (as amended from time to time, the “Dealer-Manager Agreement”) with KKR Capital Markets LLC (the “Dealer-Manager”).

Pursuant to the Dealer-Manager Agreement, the Dealer-Manager solicits sales of the Company’s Shares authorized for issue in accordance with the Company’s confidential Private Placement Memorandum (the “PPM”) and provides certain administrative and shareholder services to the Company, subject to the terms and conditions set forth in the Dealer-Manager Agreement. The Dealer-Manager receives certain front-end sales charges, Distribution Fees, Servicing Fees and certain other fees as described in the PPM.

Distribution Fees and Servicing Fees

The Company will pay KKR Capital Markets LLC ongoing distribution and servicing fees (a) of 0.85% of NAV per annum for Class S Shares, Class R-S Shares and Class U Shares only (consisting of a 0.60% distribution fee (the “Distribution Fee”) and a 0.25% shareholder servicing fee (the “Servicing Fee”)), payable monthly in arrears, as they become contractually due and (b) of 0.25% for Class D Shares and Class R-D Shares only (all of which constitutes payment for shareholder services, with no payment for distribution services) in each case as accrued, and payable monthly. Such Distribution Fee and Servicing Fee are calculated based on the Company’s transactional net asset value, which is used to determine the price at which the Company sells and repurchases its Shares. Class I Shares, Class R Shares, Class E Shares, Class F Shares, Class G Shares and Class H Shares do not incur Distribution Fees or Servicing Fees. All or a portion of the Distribution Fee or Servicing Fee may be used to pay for sub-transfer agency, platform, sub-accounting and certain other administrative services. The Dealer-Manager (defined below) generally expects to reallow the Distribution Fee and the Servicing Fee to participating broker dealers or other intermediaries. The Company also pays for certain sub-transfer agency, sub-accounting and administrative services outside of the Distribution Fee and Servicing Fee.

Under GAAP, the Company accrues the cost of the Servicing Fees and Distribution Fees, as applicable, for the estimated life of the shares as an offering cost at the time the Company sells Class S Shares, Class U Shares, Class D Shares, Class R-D Shares and Class R-S Shares. As of March 31, 2024 and December 31, 2023, the Company has accrued $66,976 and $51,440, respectively, of Servicing Fees and Distribution Fees payable to the Dealer-Manager (defined below) related to the Class U Shares, Class D Shares, Class R-D Shares and Class R-S Shares sold.

Expense Limitation and Reimbursement Agreement

On December 16, 2023, the Company entered into a Second Amended and Restated Expense Limitation and Reimbursement Agreement (the “Expense Limitation Agreement”) with the Manager, which amended and restated the Amended and Restated Expense Limitation and Reimbursement Agreement, dated as of May 10, 2023. The Expense Limitation Agreement extends the Limitation Period (as defined in the Expense Limitation Agreement) to December 31, 2024. Pursuant to the Expense Limitation Agreement, the Manager will forgo an amount of its monthly management fee and/or pay, absorb or reimburse certain expenses of the Company, to the extent necessary so that, for any fiscal year, the Company’s annual Specified Expenses (defined below) do not exceed 0.60% of the Company’s net assets as of the end of
each calendar month. “Specified Expenses” is defined to include all expenses incurred in the business of the Company, including organizational and offering costs, with the exception of (i) the management fee, (ii) the Performance Participation Allocation, (iii) the Servicing Fee, (iv) the Distribution Fee, (v) asset or entity level expenses, (vi) brokerage costs or other investment-related out-of-pocket expenses, including with respect to unconsummated transactions, (vii) dividend/interest payments (including any dividend payments, interest expenses, commitment fees, or other expenses related to any leverage incurred by the Company), (viii) taxes, (ix) ordinary corporate operating expenses (including costs and expenses related to hiring, retaining, and compensating employees and officers of the Company), (x) certain insurance costs and (xi) extraordinary expenses (as determined in the sole discretion of the Manager).

The Expense Limitation Agreement will be in effect through and including December 31, 2024, but may be renewed by the mutual agreement of the Manager and the Company for successive terms. Under the Expense Limitation Agreement, the Company has agreed to carry forward the amount of the foregone management fees and/or expenses paid, absorbed or reimbursed by the Manager for a period not to exceed three years from the end of the month in which the Manager waived or reimbursed such fees or expenses and to reimburse the Manager for such fees or expenses in accordance with the Expense Limitation Agreement.

As of March 31, 2024, the Manager agreed to reimburse expenses of $1,923 incurred by the Company for the three months ended March 31, 2024, pursuant to the Expense Limitation Agreement, which amount is subject to recoupment within a three year period.

On the Company’s Consolidated Statement of Assets and Liabilities, as of March 31, 2024, the Company has recorded $1,923 as amounts Due from Manager related to amounts waived under the Expense Limitation Agreement and $3,539 as amounts Due to Manager related to amounts paid by the Manager on behalf of the Company.

On the Company’s Consolidated Statement of Assets and Liabilities, as of December 31, 2023, the Company has recorded $16,549 as amounts Due from Manager related to amounts waived under the Expense Limitation Agreement and $19,174 as amounts Due to Manager related to amounts paid by the Manager on behalf of the Company.

The following table reflects the amounts incurred by the Company and subject to recoupment pursuant to the Expense Limitation Agreement and the expiration for future possible recoupments by the Manager:

For the Three Months EndedAmountLast Expiration Date
September 30, 2022$3,638 September 30, 2025
December 31, 20221,797 December 31, 2025
March 31, 20232,963 March 31, 2026
June 30, 20231,771 June 30, 2026
September 30, 20233,906 September 30, 2026
December 31, 20232,474 December 31, 2026
March 31, 20241,923 March 31, 2027
Total$18,472 

As of March 31, 2024 and December 31, 2023, management believes that it is not probable for the Company to be required to reimburse the expenses waived by the Manager.