FS KKR’s Health Clinic Rollup Exposure Could Face Downside Risk Based on Certain Elevated Fair-Value Marks; Largest Holding, MB2, in Structurally Stronger Position

Editor’s Note: The below is a reprint of an article originally available to Private Credit & Deal Origination Subscribers covering business development company FS KKR’s exposure to clinical healthcare rollups. To access any of our BDC coverage, please contact [email protected] or your account manager for a demo. Octus’ full Private Credit product suite includes deal origination & private credit coverage, BDC and Private Credit Data, Private Credit Fundamentals, Deal Term Analytics and Covenants analysis.     Credit Research: Lexie Wang Relevant Item: Octus’ BDC Database FS KKR 10-K Throughout parts of the most recent earnings season, analysts expressed concern surrounding private equity-backed clinical rollups, of which business development company, or BDC, FS KKR had approximately $846.7 million of total invested capital on a cost basis, or 6.3% of its total portfolio, as of Dec. 31, 2025. Additional exposure comes from holdings in the fund’s majority-owned joint venture, Credit Opportunities Partners JV LLC, which has 4% of its portfolio on a cost basis invested in clinical rollups. This report focuses on FS KKR’s clinical rollup exposure. It is likely that other BDCs have a greater share of their portfolios in these types of investments. We chose to focus on FS KKR,[...]