Executive Summary
This document describes how Kroll Bond Rating Agency and its affiliates (collectively, KBRA) analyze investment funds and evaluate quantitative and qualitative risks. Investment funds are differentiated by strategy, geography, tenor, and ownership structure. This methodology outlines KBRA’s general approach to assigning a KBRA Fund Rating (KFR) which measures the quality of a fund's underlying portfolio and the ability of the management team to deploy a fund’s investment strategy. The KFR is meant to serve as a forward-looking opinion on maintaining the quality of those factors going forward. This document also describes how KBRA monitors changing risk in these transactions through our surveillance process.
KFRs are not credit ratings and are differentiated from long-term credit and issuer ratings by the usage of a distinct ‘kf’ subscript (e.g. ‘AAAkf’, ‘AAkf’, etc.). A KFR does not provide an indication of return performance measured versus peers, volatility, or…