Q3 2020 Commentary
The iCapital KKR Private Markets Fund (“Fund”) generated positive performance in Q3. From a geographic perspective, the Americas region was the largest contributor with smaller but meaningful contributions from Europe and Asia. Information Technology, Consumer Discretionary, Health Care and Financials were the largest contributors from a sector perspective, and Energy detracted. Primaries and Co-Investments generated most gains for the quarter, with a smaller, but meaningful, contribution from Secondaries.
The third quarter of the year was perhaps the most ‘normal’ so far in 2020, despite remaining outside the pre-pandemic ballpark on many measures. The MSCI ACWI Index and S&P 500 Index were up 8.1% and 8.9%, respectively. Global equity markets continued their upward trend in the first two months of the quarter before experiencing a slight pullback in the second half of September as election uncertainty and worries over frothy tech valuations surfaced. Like the second quarter, large-cap growth fueled the equity rally as investors still preferred shelter from companies affected by COVID-19.
Q3 2020 Fund Activity
During Q3 2020, the Fund executed capital calls on 27 investments totaling $13.7 million and received distributions on 21 investments totaling $11.5 million. At quarter-end, the Fund held investments in 392 underlying portfolio companies.
* The Fund’s principal investment strategy is long-term capital appreciation through allocation of its assets to private equity investments, including other private equity funds (“Underlying Funds”). References to investments or positions in portfolio companies, and/or to geographic or market sectors, relate generally to the Fund’s access or exposure to such companies or sectors through its investments in Underlying Funds, as described in the “Investment Program” section of the Fund’s Prospectus.
Past performance is no guarantee of future results. The views expressed are for informational purposes only and should not be construed as specific investment advice or a recommendation to buy or sell any securities. The iCapital KKR Private Markets Fund is new with a limited history of operations and may not be suitable or available to everyone. The Fund invests in private equity securities and should be considered a speculative investment that entails substantial risks. These risks include, but are not limited to, market risk, concentration risk, illiquidity, risks of leverage, non-diversification risk, lack of transparency, regulatory risk, lack of a secondary market or exchange to trade securities, foreign investment risks, sector risks, and volatility. There is no guarantee that any investment will achieve its objectives, generate profits or avoid losses.
Investors should carefully consider the investment objectives, risks, charges and expenses of the iCapital KKR Private Markets Fund. This and other important information about the Fund is contained in the Fund’s prospectus, which can be obtained by calling (212) 994-7344. The prospectus should be read carefully before investing.
Distributed by iCapital Securities, LLC. iCapital Registered Fund Adviser LLC is an affiliate of iCapital Securities, LLC, and serves as the investment adviser to the iCapital KKR Private Markets Fund.
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