Kohlberg Leans Into Loans

Kohlberg & Co. wants to give investors a way into an expanding but risky area of the debt market.

The private equity company filed Friday to raise $225 million by selling the public shares in a closed-end investment fund. Kohlberg's Kohlberg Capital affiliate will use proceeds to acquire a $200 million fund made up of first- and second-lien loans.

Second-lien loans give less creditworthy companies better access to capital. Lenders get higher interest payments but also a greater risk of default. Loan issuance has risen sharply in recent years, according to industry data. ...