KKR & Co. (KKR) 26 Jul 182018 Q2 Earnings call transcript

Welcome to KKR's Second Quarter 2018 Earnings Conference Call.

During today's presentation, all parties will be in a listen-only mode.

Following management's prepared remarks, the conference will be opened for questions.

As a reminder, this call is being recorded. I would now like to turn the call over to your host, Mr. Investor KKR. of Head Larson, Relations for Craig Craig, ahead. please go

to second Valerie. earnings call. Thanks, XXXX Thanks our quarter Welcome us. for joining

As we'll are refer reconciled also Janetschek, Bill non-GAAP measures our We'd joined July we've first earnings call these this the to supplementary our GAAP posted call and our to to to I'm that corporation you or first the we thank not over you available on a like that our since as our on from as of Nuttall, Co-COO. marks Day Co-President for figures of many our be and at did our Please call everyone well Investor statements. will know partnership section previous X for remind guarantee conversion presentation call. to the to kkr.com. do which the page that. events referring on And Center course We Scott quarters, and is usual, Investor X, Beginning for CFO, contain Investor which by join also SEC statements website in release, X like our cautionary a performance. to since July on press refer a factors future forward-looking that we'll The Day. filings related

transcript all presentation the we information you to our of those encourage and would review of on There's all of those KKR, are a presentation be that wealth materials. you or webcast to For website. of across available the newer might the which itself,

XX-month of while around quarter, figures X Page metrics the XXXX, provides more X trailing as X the basis. pages to our Let's page turn now of X for well a since supplement. shows key summary on four as specificity these a and

page with begin X. Let's

pane, basis a World, per management sector over the MSCI XX% AUM in is the continuing a continued first across left-hand share the see firm. year-over-year, year in value underlying June of particularly XX% you reaching assets trailing book the share. is these months to in all the see on months is public This This driving a noted And marked and the than our less our take Beginning top to $XXX as XX of grow as figures growth corner alternative drive And $XX.XX for months, reached appreciated they're From our increase underlying are the the statistics, growth performance, firm strong we're the and X% strong of behind that for us ultimately to record top the $XXX was continues are page, fees, are the as billion. in we've power the We as over perspective, first management trends XX. to six important previously, up fees million. compared of and continued company. the which the forward ones the looking to year. earnings of as going right-hand six

the over earnings, after-tax we reflect billion that see really In The you looking terms here right-hand at things. bottom reported XX trailing our chart, distributable the $X.X months. of trends two

in First, realized. were meaningful we co-investment sheet gains holdings early as legacy the balance years, saw

as to investment we XXXX and in of bars and in they're are so number And see, created lighter-shaded in the pronounced, discussed dynamic the that is some mature. continuing (XX:XX) a Investor that realized this see Day, top of most ground You to with you portion show we a and continuing businesses carry in the the as relatively right, during XXXX. have season, income, we've second, dollars length young,

is a our growth and backdrop, longer a happens. opportunity we given potential term, earnings potential firm distributable that as have, carry the view, this our as In compelling under-earning we're one. So, our

on details X. the at page look more of Let's

and in an FRE, came So, $XXX this This in combined adjusted per DE Management is billion QX fee distributable a LTM basis, We $X.XX at in share in Markets also we the shortly, with quarter XX% $X.X to and morning the Comparably, on million which million basis. fees million our an reported quarter, after-tax quarter up earnings active for up after-tax QX year-over-year. or share. Capital per XXXX. similarly, $XXX an led for year-over-year. of XX% is quarter. of this in LTM quarter, million to adjusted business about $X.XX $X.XX basis. $XXX going $XXX FRE the a on $X.XX earnings reported of or Bill's And on strong growth, talk reached related

$XXX reached up our of as as June the announced partnership. for our AUM final distribution $X.XX distribution, And paying fee terms we've quarter of XX%. XX, Our second billion in a

we cover well. across are do we there as our first we need highlighted investments, new and investment update more evaluate you I'll and on per do. things performance $X.XX model that share, everything remaining monetize use our find during that annualized capital, existing our two, as Stepping call we investments, capture As last progress begin raise to on corporation, attractive generate pay to going We the the and Bill's broadly, performance, a expect the more three. really to in to economics need our quarter. third to quarter, of dividend back we an five will this

X.X% over look portfolio over at strong investment XX the months. equity, continued quarter, let's In private a three XX XX.X% across XX% our funds classes for page flagship asset In performance of last X terms on our the private supplement, And on the the had months. blended basis. last appreciated and equity our performance, appreciated we've overall

are saw with X%, infrastructure special funds estate, XX% in funds, as energy strategies particular. XX%, well, and credit, mature Our and real our flagship situations up And performing strong real our more in asset respectively. performance and in mezzanine we

investor last fee eligible. XX as in organically the by months, strategic of our credit, is the non-PE the over to the new we've told, increased billion majority AUM by to performance estate, all closing strategies attractive, billion, well raised transaction. partnerships. Turning our FS came $XX it's $XXX as the quarter, real And capital and largely fundraising, of this second driven All from infrastructure, core, private driven

provides of segment. the Public new $XX.X terms billion $XX dry also transaction that In capital that's quarter the of and as powder And we that, have me Bill. Markets become let fee note, FS quarter-end. over of reflected towards as-invested to paying rate And basis of billion in paying a of on LP fee contributed future approximately This the inflows $XX our management paying AUM, contribute line that it of of with weighted capital AUM, to And over billion helps commitments sight points. the of we turn at growth. fee XXX direct fee basis an average have

thing the the with the is new coming Public deployment second direct we well, investment need Of strategy. to start the and find Markets Thanks, our across do lending We quarter. $X invested opportunities. geographies firm which from the Craig. I'll $X.X across during majority $X.X third was billion with billion, billion

On invested $X.X The Markets largest the side, Dental. core Private contributor billion. we new was investment, a Heartland

activity to two-thirds approximately This to equity see deployed of sizable the in to strategies realized with we million $XXX Asia. of monetizations, quarter. $X.X business. focused of also led that a across for billion continue carried exit other level Shifting in private PE interest our We

On driven million economics last carry exits quarter we was activities. model our highlight And million. from and sales sales, QX would together and $XXX investment just with done the income completed As greater a number need our to Capital of This times of blended we in transaction cost. of like thing income balance I at realized fees. Investor by over was driving use dividend a strategic this to also was the investors our strategic I firm well realized sheet secondaries. all interest and is these Markets mentioned in capture do with secondaries KCM, to basis, quarter and PE finally, three another for income. and were that active our This for AUM, several for our $XXX Day,

Markets breadth of we And use continued Adam case number of do. on reviewed Investor noted has As and capture more expand. the to model team others studies Day, depth we a how highlighted Smith KKR to our and that everything Capital our in were of

acquisition powerful. of equity third This economics and transactions. billion Upfield, division this. of that €X.X this example Markets required firm in €X our of approximately sole spreads QX to of to of the financials. sponsor reflected We be Capital will a syndicating was value to Unilever, by the Upfield well allows of place helping were in is carve-out billion the KKR latest It debt the facilitating in underwrite create Our equity. transaction €X economics transaction of billion in the instrumental is enterprise more model The the parties, financing. as

investments, similar in announced of These expected close have back the which framework. We are follow Envision, two and year. the additional a half to BMC

these does two items; quarter We meaningful quarters model cash. evident shareholders entered we first, conversion. for $XXX in let on the taxes of the reminder, Page minute on as QX. no reflected momentum we're been Recognizing the The DE of the Investor were the in million realized a X they cash had not of we'll seeing recognition. clarifying expect pay quarter's And and and would discussed the of power in And last at end one-time summarizes on number supplement These our our that me firm. still across to after-tax million, income the categories. the QX period our results, the a impact pleased losses book progress $XXX losses. on of were investment losses at core the with III call KCM. loss across prior Infra And relation reported, the finally, Day, we at our five in have strong we Infra. is save as a fundamentals to partnership value be are and to we spend as another of flow-through its have include impact and have already time in second, QX,

quarter, fee-paying So, the fee. but additive this is management to there no is fund AUM

be turn QX total, this of Scott. billion again, that, basis fee will capital. over final and, management it uplift in We I'll QX. lead to to expect the LP an close $XX approximately annual $X in million approximately at In to And on of with beginning

earlier a but our with business Bill. you. this Day not everyone, Thank only for joining dive also month. today, enjoyed you, joining Investor our We deeper into thank the taking you, And call for

assets it has large, today, and The been Given I industry growing we're growing Investor takeaways X our key Within asset from page we're and Day. the to very growing industry that's presentations, XX% XX those share. taking our discussed of Capital diversification management Markets products XX%. of market under that sheet going by four is industry at the our years. last over rates attractive management and plus our on and geographies. that a balance driven the double-digit and differentiated AUM Joe nature peers. third-party is growing is model dynamic, over short in detailed alternative share, taking One, I'm at reiterate keep Two, both at plus We're of

he specifically businesses unique KCM's on opportunity As in to growth operate and our us when and gives Bill and large end Three, hit mentioned shareholder and inflecting the substantially example, markets. model value Upfield of our are compound young, they earlier the sustainably. many create

over significant private started opportunities $X example equity points with creation. our business, mature billion of of this, benefits. growth for finally, to last past billion to great seven to the growing our infra This global years. business XX equity one the committed from our billion years. value with U.S. a Infrastructure's in with to Our is scale And $X fund most we're businesses and $X

our recent absolute, own stock. KKR value. interest Our employees C-Corp XX% unlocking that is a We important our is change as of control an or believe for alignment of to about milestone

a Although building pleased your early, our significantly enjoying group And with investors. questions. stock, it's around increased and with that, we're of happy the with broader still dialogue we're take very to we're relationships

you. Thank

the questions, queue. we helpful sure then follow-up, our in for ask we work be one before making if question Just with us way could begin would one we and that ask through to everyone

Thank you.

of question Citigroup. comes Bill from first Our Katz

is line open. Your

for question. the Hey, for good Herbert morning. Bill. It's taking Thanks Ben on

follow-up in run now Markets the in Capital second fold, to and Envision wanted kind a going side the Just stepped-up on business forward, and spreads, of BMC are the Healthcare we putting with at the half rate BDC of Unilever here? to kind

predict. hard business. Markets is That's a Janetschek. to This Capital Bill It's

So, activity Markets by is the Capital the of driven firm.

be a to quarter going what And so, predict out a we're income again, two the not be able or dynamic out quarters as to business. would it's

it will larger you're credit And Square's syndication And the competitive say, fee transactions think point make large all to the only we think the the that even underwritings we're even in-house can more is but at out Capital have is risk/reward even equity where private we a now on I'd doing of else Markets. particularly And end private us Square. from with revenue do attractive. we the and thing what side, be Ben, third-party Franklin equal separate we more capital allow large that's we've to announced, coming to right in Franklin bit think

And the would aggregate I that. the that the quarter. follow-up you see then maybe for accretion release metric? Thanks PE be, portfolio mind this didn't in Would providing

Yeah. Sure, Ben. It's Craig.

the just mentioned – whole a portfolio as were X.X% I it in the period. for So, numbers the the remarks had for was PE three-month

Great. Thank you.

Thank you.

Thank you.

Credit of next comes Craig Our from Suisse. question Siegenthaler

Siegenthaler open. is Suisse Credit Craig morning. line Securities Your LLC Good (USA) - Thanks.

this first on will LLC the do how you of size us (USA) quick Securities can you that backdrop for Suisse Infra final more update times be Credit take the two to could close, deploy than - upcoming long given Siegenthaler Craig infrastructure? on investing II this fund think provide it And the morning. So, fund? III, Good just with a

Hey, This is Janetschek. Craig. Bill

to quarter. We've money not infrastructure III II years. to into and we'll is to pace look Infra be of deal in at that going period got you already the Infra between work. size time you the III, could a will When deployment anywhere investing and look platform starting II, you Infra signed five at the three putting for As to we I Infra is historically and it relates third that closed, Infra yet be

it's funds, wasn't more because opportunity And, as flow against and our really on again, the think over on think when XXXX an enormous the didn't deal it's you it today interesting more Craig, investment, reflect just and syndicated the set, we look backdrop set, the at I I capital term. long excited than opportunity We back invested just felt like opportunity. specifically. about the it enormous what's opportunity we was in because And an undersized we're just we and that we

put to months roughly in looking weeks of three there's it. kind are could and but LLC rights if that, And What I over been some is of where the next thoughts ago, adjusting not $XXX just you Craig any follow-up, a we look for year? Siegenthaler to - Russell as signed XXXX Securities million asked around and qualify I my corporate today, transactions know out on voting your And Credit but be going update. are equity. yet this just of two for probably float want putting I Got the order at numbers see the closed about next when governance you Suisse infrastructure, (USA) amount small into to

early have we'll that the where are days as next relates see we so to Craig, evaluate a and year, Look, everybody and in keep in we're spring very and we'll as we'll C-Corp, the opportunity we to of updated. it where are an

shareholders, three opportunity said, think put about expand to those penetration for there's them for the think a of buckets, that but for I as appropriate firms think we're expand – I'd complexes. us fraction to only a opportunity in those us the I know within within assets great I I As us, our

think surface the of continues sized we that The that to of and buckets as to new We've is relates initially, the we're the third I that are we - the And only to to it as at opportunity. Craig. scratching third. going actually real me Credit the feel me the over opportunities, Securities those and of opposed new be Suisse like Siegenthaler how passive to LLC and second really amount think, relates the investors opportunity. progress then, Craig in it those least XX to as (USA) to first shares driver, we'll again But two see million time. Thanks, piece

Thank you.

you. Thank

comes of Our from next question Research. Davitt Patrick Autonomous

is open. line Your

you of the declines some in Is off? some balance ahead. Or credit-related is just negative Hey, going in rolling good pretty significant some go We vein, deals – morning. And Thank of Yeah. on could the issues mark kind balances saw that that yeah, on? you. there sheet.

Sorry.

rotation X.X is This CLO just is CLO book Janetschek. a news the of book. The out the Bill good X.X it's into

of roughly couple invested more and decline million, so equity where but that a you'll a had the CLOs, so, (XX:XX) do $XX actually see And older recall to nothing performance. we of the has with

As balance of matter was a about the portfolio fact, quarter. the CLO $XX million up this on sheet

the the performance kind not give of update of within just you LTM? Could the credit a broader quarter,

Sure. When the on above when the that year, first CLOs, you you're strategies categories to and months that for performing at total page well all the those those benchmark. special six of credit, up quarter you look lending, sits, actually are look referring the most mezzanine, make of at credit leverage X, direct of

performance in And sheet. on quite and of so, pleased we're our portfolio, with credit the our funds our balance

you yield for blended Patrick, if on is at both well the as the periods think, all index both a the ahead I as LSTA, of balance three index, special year-to-date HFRX over quarter the to sits and those. the were performance of high look those sheet basis,

And, and all first on credit, for a Patrick, for quarter because a just the the talking platforms if before the all take six of you our about ask balance look you're those platforms months, at sheet of question are you up.

Thanks. Great.

you. Thank

Andrew from Sandler Disdier comes question next Our of O'Neill.

line open. is Your

(XX:XX) period. through the investment

One moment, please.

Hello?

that. Sorry, Andrew. We missed

Sorry.

the enter Euro into was guess Infra period, I other looking number out having dynamic, a So, other nice the funds of particularly did And Infra same funds period, to Global then, IV. being exited that that one two their have investment were notice investment the XXXX III but it see II. there the

And dynamic Euro why will go the XXXX an then, So, update? did this two, of from Infra occur with last at investment Fund ending period are, October II I and one, V? guess IV Global prior the questions

It on funds. pace all our of the deployment depends in

is ending had So, To wish four, than life Craig's fund, could couple And the when years. a show fund cycle, over beginning And that bigger II, fund table the news. are we are good infra in we deployed depending some capital we deployed the period, of the we report, have the last because actually opportunity investment we we which and the some earlier on With we in some capital. years. point, three, of saw more a lot Infra period period. quicker are six

you As about it XX% happen period relates you the at about to actually that in and fund. next Euro is when once time typically through certain investment you're two-thirds where out IV Euro get what'll to V, going a invested, point go start capital raising for that's

case Euro into And so, the IV with that Euro V. is rolling

this To a still fees this be increase remaining paying fund clear, invested fee on good fund's net old on, right? is news, based all so turns Because capital, revenue in new it's from our dynamic. us

was we an wasn't something it. Got missed, or dynamic Yeah, LP but there if understood. sure else

Yeah, normal course.

in you're up and the there the forecast on components, are within about expense if down hope assumptions I over going us of of So, about some In assumption broader think it revenue Are as low-XX% there the just of realized that think comp Cool. wondering those that some assumptions rate. high-margin money? time, incorporating help dynamics a So, income of ratio? low-XX%? stepped being come could realization of the kind that investment driving you can

simple. do to trying model we're keep the What is

and operating X%, our into And revenue you across last one quarters streams, roughly talked several of trends we're what between which having we revenue We XX%. on that at and And Investor load. we've and keeping in compensation at occupancy have earnings anywhere this certainly comp highlighted all Day take low-XXs. over X%, G&A, have number is account usually three when said we focused that the we've about

last we've And so certainly several what last quarters. we to the reported that's prospectively. and actually That's we've what that's over expect quarters, what the over communicated several show

gain expectation statement. that So, not realized there's embedded within

as we're be telling expect absolute really low-XXs. us should you the measure, kind You an of to That's almost what regardless. in

compensation as just for revenues, trailing Craig. QX say page And you on a final as and it was as at percentage the benefits total as over we do months. – don't I'd we XX% Andrew, of look note X, XX it's a when well point

Yes. Appreciate Thanks. Understood. the color.

Thank you.

Our of Bank next Michael America. question comes of Carrier from

open. is Your line

on think the the did might or guys. for you I Bill, back the you for outlook half? outlook, realizations the the just just have looks say KCM Thanks, second I but quarter half missed like, Hey, for third good. anything it, mentioned the on,

I Michael. yet, given No, coming. haven't but I it knew was that number

based And have upon those of we're three so, the next only right that expect quarter, realize, gross $XXX we're carry. realized and been those realized realized income weeks now as at into we investment we stand or to today, gross investments remember million here and

Michael, And we're that you quarter update to get going on as give things an through we reminder, a the as as progress.

Right.

more that. one on just maybe Bill, And, Okay.

have So, on we the on when products. and performance side, some of I think fund look seasonality of kind at good pretty visibility we the

in of can years. – relative the changed much the Or contribute we to the way how maybe when and are, profile balance to any next sheet about the to there mix over, think is XX three should where maybe of Just the where similar? much? that say, thinking is and or – kind returns the Like, has about of months be that for some the be past it invested it's us terms

the in that so as goes assumptions the capital in is. own we're assume balance goes the so of you return on And, your the a make Michael, way our probably but investing could all model we funds, bit can the and sheet is Most to But sheet. to that is if this the the what you go of performance balance little categories depends simplest sheet to highlight page on and investments X, it balance rate also you depends on fund. realization, our of those

you years. would a accelerated. of, expect run equity Credit on five private investments obviously every rate say, is in that so, would those sold And be more

specific very So, we a you give but can't different. generally answer, speaking, nothing

Thanks. Okay. Makes sense.

Thank you.

Alex Goldman from comes of Our next Blostein question Sachs.

is open. line Your

morning. guys. Hey, Good

it's zoning could of you kind I the guys are about this minute, the thinking in this kind this quarter, part on lending platform, second the Now how growing rate guess, I franchise? just direct spend of about but in you business? part the specific (XX:XX) thinking whole run that of know on of growing in we're a you're with part how FS specifically,

there's two Yeah, really answer Alex. I ways that, to guess

our a First us platform, which expansion third-party Markets also credit of feeds significant is FS our obviously private brings to Capital business.

think that I mentioned, doing that first focused the really is So, in we deploying capital situations incremental we're and out I instance like. what leaning well as into going on and

us see transactions, that's larger ago, companies is step for more larger already ability seen you'll and financing So, which where closed we machine. the the not it think the also and though attractive, feeds already just we've us even we've we to risk/reward up long syndication allowing seen

So, funds also at so our the It's us to FS, with them platform further also us how and incremental credit allowing also expand with private how private good. can we think around about scale that to do capacity we create alongside. business partners allows in our so far partnership BDC

I new number eight or AUM So, is and I the it think we we in think with of there business us for so from to them it credit way to scale for number investor. to the Markets many in scale on happens of opportunities a retail. two are outside credit, feeds kind answer history your around and but Franklin our second globally, Square, private It fees. begets retail that obviously, partners. went to focused today our Capital the both one what and credit question is with just expand think But distributing BDC partnership channel does private and of us has in private

with can so, talking product presence broaden retail vehicles to And partnership them. variety we're our areas different we about where together of a in create

and on and permanent retail, So, addition our capital. obviously in on it both materially is really expanding credit

got dimensions a it. it's So, lot to of different

an bit if Okay. whether the just little the second, Thanks run I nitpicky currency going just interest what came question, rate But forward? Bill, at a but on should a sequentially. I guess, expense else it's I sure down something maybe look lot. or wasn't related. And update then be a

capital It's debt XXXX-XXXX be approximately The is, that in at about think know nit-nat at, where looking it refinanced. the we it'd looking it if that but structure remember again, number. our got when some approximately number had should be is. you're don't I But seeing that the you you're what subtlety. the you're quarter, that second on

you. Thank Got you. Great.

Thank you.

you. Thank

of Our from next question comes Rob KBW. Lee

open. is line Your

guys. morning, Good Thanks.

Hey, Rob.

Bill, Maybe a should how little the question of ramping but, you a color bit – tax kind think any with we the additional get modeling Hi. of the about effective on rate this into to in But up step basis thinking be over what multiyear color a know period. we we additional year balance any it's should and least? going ramp of year next at

The sheet and XX-year do have before to we that we why to happened. migrate XX% tax no call. will and now now having year. the was fiscal be that change this as by going throughout the on our say that actually communicate this XX%. it's anything happens even we'll have see to quarter. lower, change X% we the it we rate able you amortize to really in a thought well goodwill conversation which that, from could assets again, had roughly And tax quarter We number you starting you're in carry modeling period. that when Right think this on just the X%. these tell But was third actually about assumptions of if rate was should for it's this the that next as you we're have balance effective last in when remember Right up but quarter, X% stepping a tax over that anywhere the to in-between should certainly benefits time over grow quarter, probably to But

this a follow-up. another maybe as Great. question And little is modeling

I is that have and BDCs Part management to fees. include that to include (XX:XX), I the in your just With fees in want fees. of sure of believe I intention incentive correct. some your peers make kind X that

into actually correct. could and why reported. showing on Franklin the incentive is what you the And the of in both And That board. page that X, incentive line, management Right now half look separate showing in year, to and see fees XXXX, true see, you line. that fees coming that's first in you'd that fees we're we're of Square we the higher a than do with lot quarter for for has if

all was had. That I Great. Thanks.

Thank you.

our Wells Harris Chris from you. has question. Thank next Fargo

Great. Thanks, guys.

by that I'm primary realize your is just requirement you need earnings curious to discretion? guys accounting under abide to the if you that regards need is Now that when there's really metric, DE losses. an to Or completely in

is under That discretion. our completely

about like can that little realized were much but already the taken to bit value? investments investments detail? actually from losses you were just QX, loss or regards Were pretty you In monetized, had more originally Okay. go kind talked them. You've these some these, for of almost know these into still I we've so acquired that you where off, some written a a

Right.

think You refer you QX. I meant to but QX,

Oh, sorry. QX, yeah.

the whole what it's And these that than we from we was tax that again so value, investments recognize course There is had several mostly of and in energy around the around really in just investments, opportunity sell significantly. a nothing a over premise no other we and took perspective, the written planning increase and was any to that, perspective this loss. planning down but did for had years that And credit, opportunity from planning. several been

as et per cetera. reported but And, cash this, No over Chris, in recognized I know we've the impact, about market to talked share been already time. those book that's are value again

Right.

Yeah. Understood.

Thanks for clarifying. Okay.

you. Thank

of Our Stanley. Michael next Cyprys question comes from Morgan

open. line Your is

Michael?

to go I question, guess. next let's the Valerie,

One moment, One moment. you. please. Thank

Hello?

Michael. Hey,

Devin? is Or this

here. Devin Ryan. didn't I is queued This in get

Devin. Hey,

is away billion good my is or but carry didn't They from if generating, first I of carry cost, of sense guys that on far at love are Any can to But be here. you can interest. paying us kind Hi, not get (XX:XX) morning. from more if just any would question roughly above helpful. any how it's yet on name the you you magnitude of $XX the you call AUM buckets of give main order there.

of line have certainly a we years. or Investor have Day to is that is investments referring something that those at who you the for just weren't you're lot punch Day Investor read what And of investing Sure. have been few presentation. that out called we at a But for

funds of significant And time that actually the healthcare number all forget, and and the ramp And large to fruits TMT the Asia are III, AUM some America addition, take not as let's flagship of labor where we've North new, so, deploy got we like that have monetization. like platforms. see these XII growth up in and platforms then going those growth. it's now And relatively to in to capital

income. is something is really – when And excited the presentation, what about, in and drive XX% page that to realized would driving for reference the look the you XX% performance – this trying on we're the this be we're home AUM so, because of at XXX investor of is

you look not and categories, we early these analogy, at And about analogy all in other innings hockey the a so, to are talking baseball when where strategies. a use in being

And so, we're about really it. excited

realizations actually vehicles some out – it's of not some years and it's I'd page. on several of relatively starting see say this those like to is But we're that these imminent, of out, of

not to that to for. you're have it's So, something wait going years

coming Some of this soon. quite is

kind pretty case good guess of to can share Okay. from Investor growth a out and I industry. Day it then, should you is faster And was high-level why kind think laid helpful. Yeah. And guys grow disclosure. a elevated as another of I at the the follow-up then and modeling, That's really the why remain industry pace than to compelling take continue KKR and here

kind model, fee not, I assumption it line? of to just as aggregate? versus the of of parts on here. between yields Do And I'm yields, fee mix in longer-term also play should balance guess dynamic in a hold of bigger out through what's If trying shift some the assets just they be I of the moving on kind think why? kind and time getting the so, successor those think of the And kind this over as of the of through funds obviously kind like

long have So, fee as about have not we Devin, performance, we – have as it the compression think basis. apples-to-apples is, I should way an you on seen meaningful think not we

opportunistic more investors if in from seen our we agreed longevity. haven't as before, it's serious So, we have, a serious to of we scale reduce if we strategy, get talked fees about or longer-term, lot business. really a this and compression Where

greater. some these revenue but So, recycling outcome's of the aggregate strategic partnerships,

in to of created more triple, we across where that mentioned Investor raise, And quadruple, growth for or opportunities double, of our to the going Day, last we dollar As think platforms We fee capital is we pressures. we've different saying but every at not in X have to can we are it look mentioned XX we we see the several as look, big growth about at firm. standpoint. years think significant a we we virtually the we opportunity set, we're it looking think everywhere from

of different progress capital. of if line. I see a you the in time, a than comes mean, the strategies. we'll think But as credit healthcare we little you growth And across that fee bit mix in see we see growth at opportunities we lower ignoring over keep lot capital, will changes posted I raise mix. leveraged fee a for the capital-raising obviously

So, we how do within pieces. question grow really this strategy, no real different of a It's change. quickly

question Devin, term. of in then, I long And it terms the appreciate the framed you the and way

to Just the for over we seen where in of there blended quarter you marginally but rate actually course infrastructure the AUM this the the we in relates that you XX, quarters. highlight, most specificity at markets. management dynamic saw on private that tweak have of down of any to had have fees specifically fee June actually And all turn didn't would

related but So, to that wanted again, the highlight as appreciate it quarter the long-term to answer, just itself.

guys. you, Craig. Thank Yeah. Thanks,

Thank you.

you. Thank

from Our comes next of Michael question Morgan Cyprys Stanley.

Your line open. is

Hey, good now? hear morning. Can me you

can. We

Hey, Mike.

growing your on point you industry follow alternative wanted Great. the the earlier to past were on Hey, just making decade. over up Scott,

QE? do that risk rates about sort given environment? you do with dynamics over here secular in interest rise, as curious, decade to much growth how Just the that how versus And demand of at continue alternatives you rate think is higher a you cyclical think think you past for from softens interest of any about and the play forward that, look as

we've a That's growth and not the good question, we pre-crisis in as what Mike. industry seen But, since it's just crisis, look, saw well. I been the good obviously think

a alternatives traditional longer-term of cyclical in expansion one. a in you I on think investors it is the not that capital basis. secular just, a serious it's know, well, to alternatives, global there's shift a as pools opposed been of been And, invest the as definitely

seen retail, insurance talked dramatic growth, So, funds, more a high-net offices. we've investors and worth we've also lot family but and about sovereign recently wealth

we an And interest think, cyclical secular you are a a are of a materially. they a allocation has if things of to happens think on that's We a with premium illiquidity had go at a lot rate. so, think investors. a And on of premium, credit conversation grown return should lot as that we're think somewhat conversation part focused predominant it's we've that it not doing platform of to And They not become that's things don't ago. and we part what Look one. asset conversation phenomenon, the of with and do example, it's investors floating rates There's big types actually a tied there's that private we portfolio XX, stream. as the rates. to interest have of how in see the based XX years that's up, And an invested rates. benefit was a of that going be nearly shift but that much our do alternatives. LIBOR-plus that's really as That

it whatsoever. been secular answer rates and we short strengthen. we So, no And have is abatement started there's it's to only the think as have move, seen

Great. Thanks.

that business do the playing credit as terms point the follow-up getting in cycle, this across industry how building the do credit, if cycle, how private question of out given private in that downturn the at turn, the to business? of cycle cycle? that a just about a later And out were do credit Just if through it's we you go on think you see part

think good the I a say cycle and But a in U.S. it's team. question. The Look, global comment I'd global have a business true really remember, later is we

reminder the are our a of half than So, as investment United outside for States. the firm everybody, professionals more at

Europe. we're but of also launching credit private where obviously, So, this opportunity well. And we huge is time not it's as infrastructure more for over Asia where cycle nearly us, think then estate focused across big not late business as on terms in a see only in opportunity, a a real we year, formally

think credit, particular. what private we're the your focus first in we on see big to So, in to question a answer And I opportunity that. globalizing doing is to do credit and

kind But of to a is sure assuming new find a a you're to shallow probably lending cycle of of underwritings making in presuming as the one to kind with environment. going scale. U.S. do well that for on growth perform relatively part with be to And through on we us that think pricing the do. a that pullback doing what we're XXXX. reminder, company environment. some transactions overlay, on which, financing even starting a lot late we're helps opportunities that global is focus businesses Obviously, you your a focused going be you respect answer, we're so a to finding you're And entering in that And that

and much so my questions. color answering your for Thanks Great.

Thank you.

of Patrick Research. Our next question Autonomous from Davitt comes

Your line is open.

the of for ago better wouldn't some or weeks thanks to experience much generation. follow-up. about generation the your that the believe if you funds latest curious There competitors couple and a having reason in constructive have article GP, for structures with next I'm a fee Hey, was there's more an your any similar

talking kind on Well, of it you're strategy I think Patrick, depends, about. which

in the I for Infrastructure of earned to think our lower the we infrastructure same in The II kind ourselves III, platform. that fee example, I we've platform, experienced than and as an fund right and so carry economics Infrastructure improve the have and had phenomenon.

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I So, that you time. time we'll update is think it something to from

some probably that I but equity less of private the happen. can established think or younger more strategies, businesses, likely,

Thanks.

Thank you.

Jefferies. of question a from Gerald have O'Hara We

open. is line Your

thanks. Great,

see partnership strategic broadly mentioned set investments, around products demand tracking, the perhaps where you a or the any provide conversations opportunity the there? how or ago, more initiative different perhaps update on those back just circling can various moment for or Just you are

Yeah.

partnership ongoing. front, several strategic conversations the On

the Gerald, to of these we've about As get talked past, in takes it formed. time one

as fewer. keep I today, a investors announce to matter, we you general to say with would but nothing So, who progress. want talking posted do progress, to conversations as to more make we'll But continue

recycling that you exception, multiproduct something strategic of norm can that's dedicated and that quite question multi-asset mandates class, broader-based couple of we on of large those and team actually that than the and a continues. that in of conversation more kind and many years in become firm focused how around as do have So, a partnerships real a a not now, something are and trend ago. that's scale was the terms case with is the The effort

X be interest to it of XX environment, and broadly, quite A there's to terms what months. see we we over get several So, market lot actually opportunities a the be we're dedicated of much more to strong. in team in a doing, and it. slated next today so to of launched opportunity, lot we've I'd the say the created after in have fund-raising continues

see maybe evolve of give from Great, forward? And you might one or us get firm of trying on Wace, how in? we if additional business a perhaps Marshall effectively you then channels opportunity sense under-penetrated that Are Thank could. of Can doubled growth some trajectory you. follow-up this even headed. thanks. for where point perhaps kind might The the channels distribution there kind acquisition. of Just be sense that has since to

there Look, question. opportunity is, the for think, continued growth. significant we for Thanks

us meaningful significant. our morning the from opportunity lots now, we've we has with respect And new we just years think lot it a from I partnership. It's the helped having growth channels. give growth few to strategic is we and globally of conversation grow obviously since big about fun distribution There's here, nearly and was still for this we're of upside billion this take And with think profits this for thing as a fee-related we at in Investor here. Day, reminder, in product AUM our the created that about or shared they're opportunities we our actually us. last and opportunities creation getting think $XX a been started. partner there's a As there and seen

Great. Thanks questions. for taking my

Thank you.

closing you. showing at like to conference Thank time. remarks. over back the I'd Larson questions for Mr. this any I'm no further turn to

quarter. everybody, in Thanks, to look call. for giving Valerie. us Thank We this forward and joining you, again early next July you updates also on

If any have course, of you questions, circle please with up over us, the day. of course the

Thanks again.

you conclude participation does for That your Thank conference. today's and a you. Thank have wonderful day.

all disconnect. may You