Demand for credit funds has been strong this year, as retail investors chase higher yields. The latest fund to come to the market, the KKR Credit Income Fund, has increased its issue size from A$750 million to $925 million and the offer will close at the end of this week - just four days after it opened.The fund will be managed by KKR Australia Investment Management. It will invest in two established KKR funds, the Global Credit Opportunities Fund and the European Direct Lending Fund.KKR says it is aiming to deliver a distribution yield of 4 to 6 per cent a year, net of fees and expenses, and a total return of 6 to 8 per cent a year.There has been a boom in credit fund offerings of various types over the past couple of years, giving investors access to yields of 5 to 8 per cent through exposure to corporate debt, secured small business loans, consumer credit, high-yield bonds and mortgage-based securities.Credit managers with ASX-listed products in the market include Metrics Credit Partners, Perpetual Investments, Thinktank, SocietyOne, Gryphon Capital Investments, Neuberger Berman and Qualitas GroupKKR has had a dedicated credit business, KKR Credit, since 2004. KKR manages a total of US$206 billion of assets, of which US$70 billion is managed by KKR Credit.According to the product disclosure statement, KKR's advantages in this market include its global reach and well-established partnerships with investors.More generally, it argues that banks have given up much of their share in commercial lending, allowing specialist lenders to build substantial portfolios.It says: "Since the end of the GFC, there has been a significant change in the investment behaviour of banks globally, driven predominantly by regulatory changes. There has been a sharp reduction in the number of banks competing in the [credit] market."There has been a decline in the number of commercial banks operating in the United States and Europe. Among banks still operating, there has been a renewed focus on core business. This has provided an opportunity for investment groups such as KKR to originate loans and invest profitably in the credit markets.The Global Credit Opportunities Fund invests in the sub-investment grade credit market, purchasing securities on the secondary market. KKR has an 11-year record of investing in the sector. Over the three years to the end of June, the fund returned an average of 9.1 per cent a year.The European Direct Lending Fund is a portfolio of senior corporate loans largely originated by KKR and not traded on secondary markets. Loans are senior secured and floating rate. Loans in the portfolio are expected to pay a yield of around 6.5 per cent.Surprisingly, the PDS says nothing about arrears or defaults in the underlying portfolios.KKR is paying all the upfront establishment costs of the offer to ensure that the net asset value at listing is not less than the funds subscribed.The fund will have a distribution reinvestment plan.The fund manager will receive a base fee of 88 basis points of the NAV a year, plus GST.