KKR & Co. (KKR) 31 Jan 202019 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to KKR's Fourth Quarter and Full Year 2019 Earnings Conference Call.

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

Following the management’s prepared remarks, the conference will be opened for questions. [Operator Instructions] Also this call is being recorded.

I would now like to hand the call over to Craig Larson, Head of Investor Relations for KKR. ahead. go please Craig,

calls, Welcome by fourth and Scott first CFO. of for Krystal. by be call. Lewin Rob Co-COO, XXXX I'm the our these one on joined Nuttall, time pleased to you, to quarter joined our earnings and I'm Thank our Co-President

As with Janetschek's you named retirement. connection Rob in was know, CFO Bill

available to statements, like please on will release, the call, on to non-GAAP to measures refer to I'm going And press section and deck. Center remind our of deck to We'd Investor to not performance, contain our are on X and the for everyone future GAAP quarters, reconciled at over refer related which call the so in that that, that call or a events factors these is which like be we'll we'll Pages the be supplementary The our guarantee figures website which KKR.com. statements. referencing do X of course referring SEC we've filings to cautionary previous also by begin posted forward-looking

of on power importantly, left from charts side the Page Most Page. continues as the firm can the of X. the on grow earnings see hand first you to Focusing nicely the

$XX.XX a while is $XXX Our AUM share. book per value billion is adjusted

As we've power the been we're our you and value. know, big of seeing through compounding believers in book that power

dividends value And paid And per to years, grew over we've that's XX%, XX% out book in share one over share book compounded three largest being public compounding, per month any XX seen value each alongside. last increases period the the this year. addition year, we've Over as are the of a remember, last company.

earnings, and are minutes. fees growing realized year, hand down talk $X.X XXXX. due year-over-year Rob Page here totaled lower from months, gains X, up both have distributable your last billion Scott growth asset at the to XX% chart and few the for about being XX a visibility of after-tax in Looking trailing been right given our partly steadily, going management to in

supplementary for basis. million, were headline Fee or numbers for a of compared quarter basis, After-tax to share of earnings and related for million adjusted our full-year the the on X well per and provides a quarter $XXX fee year. on increased just some both a up XX% paying billion. a the distributable were $XXX earnings snapshot at over Page AUM the $X.XX deck came the AUM and as were and for in as quarter Year-over-year, XX% of the X/XX. X%

fundraising strategies. in had Looking estate organic real fundraising Private in quarter activity, at the our strategy held number four most had infrastructure our Asia first inflows year close QX, we across and In platforms our of younger and we active by Markets, strategies. of driven the

iteration the size We early also here second next-generation our close the of the final and times technology fund second for in the over raised three growth our is strategy, capital first. of with XXXX,

billion. here our from $XX ownership we increased step to has credit and total XXXX, Australia In several our Since announced of Wace on Marshall leverage we also the in businesses. quarter, products, and X% Marshall inflows the CLO permanent saw our XX%. vehicle Wace, we've raised of in including the during in Public with Markets, to final And of credit note listed partnership first AUM off partnership our billion the bringing $XX capital closed September

for of the over XXXX Private well in the Public the across investing mostly footprint year. of This well as out was Private Europe standpoint, active outside in grow equity in was activity two from global quarter our Markets. our significance. and $X as Asia. really we activity reflects as activity strategies. continues Private quarter and both the And billion deployment Investment invested investment most In of as our true an Markets, was private increasing things, as QX diversification nature to of equity fourth investment

PE capital in more the a $XX for invested than than Markets of $X.X half of invested little of quarter over year. and represented billion Private of the less a the the billion capital little half

figures. equity, growth As real of our core through infrastructure, platforms are we're the impact and this seeing estate, scaling, equity the deployment

as Public in with quarter in by our Markets $XX opportunities investment private the was the activity European. also credit for the Markets in deployment the And billion, here increase year, of exceeded U.S. driven XX%. $X well activity as business Public billion an

you're the our credit these is through that deployment as of platform statistics. seeing Markets Private impacts with scaling, As

I'm series Lewin. of the Credit recently, his Human equity positions KKR career Rob? as also co-heading Rob professional, his here private of Capital the And XX worked pleased family for us. half and the Markets other KKR joined ago he's business to our for has with U.S. for U.S., and second that, of career, a investment and Rob both an Most the well first as when a And in to years in and Development. headed Rob across a Corporate of in introduce returned his Rob and serving held as as Asia. and everyone businesses Talent Treasure to Capital Head Strategic half

to of the pleasure this to for and have function and Bill be Thanks I'd morning a on years. to months meet leadership also the last many hello you to call everyone. finance over to It's and and opportunity Craig, get XX his over know I ahead. like quarters KRR's of thank a the hope the lot,

controls. and I intention and Our every that tradition. finance team has first of focus excellence a of continuing have tradition rate operational

XXXX up the Craig for financials XXXX $XXX quarter. our of as and compared and a to the fourth continued in both our circle QX the for very Markets in fees the full million Markets, results solid moment. totaled numbers year. will are quarter are In to to well, us, noted, XX% Capital record XXXX. Management up the for full quarter our from for I fees, year $XXX trend business million results and XX% to for down Capital very These transaction Turning back year. but

quarter. realized exits in million We driven European $XXX of times income. had cost. of and performance number the activity to Turning were of realized generating by and total was Asian investments. investment quarter at accomplished of These a million X.X this approximately Carry income blended of $XXX activity exit monetization a multiple our

of and million revenue. to expenses. benefits, $XXX included comp, total or based came our at Compensation Moving the our the equity which for XX% quarter in

the compensation For came expenses with both million. XX% figures revenue, low target. other taken at $XXX below Occupancy operating our of together total are ratio XXs compensation was year, in

primarily our this of non-recurring more were $XX in the vehicle million related Australian-listed on to mentioned fourth capital a spend quarter, pause including due Other for Craig to the the on elevated earnings a tax the Putting minute all I that here together, or Market XX% after-tax thought business. quarter, expenses $XXX call. earlier XX% distributable expense I and were operating per would permanent rate Capital million share.

Market coming very the a U.S. this Capital meaningful private to focused worked business our based KKR deals. diversify over have team decade small from last equity Today, has We hard was breadth business [audio primarily that on over from XX% a our and product, in revenue gap] revenue our resulted from diversification Markets quarter around Capital of clients. class, and in that coming of XXXX non-KKR outside asset the U.S. across

$XX where rack, be activities, to course a market million range. to the driven now refinancing was baseline quarterly by ordinary conditions. and business this have increase As a we financing reasonable should capital revenue in of point $XX million This result assuming the

exceeded participant last over a revenue, meaningful In is eight the also years. positioned in revenue three ourselves million several $XXX the to in line addition last to business be million revenue also have averaged $XXX a has six which quarters, year, the and of we that almost large transactions base of of why

our baseline revenue we more which business can with deal now grow activity. from short, In together we has component, think upside larger overtime a

to forward transactions we those QX XXXX, the As of in we large don't any have pipeline. look

the expectation which here more $XX XXXX. range, in $XX So, million Market in with that QX is to is million consistent that is our likely QX revenue Capital from of

earnings levels. the we growth several fundamentals our Now, most really at the our core of next years, all distributable in over are business about as record the important, of think

currently fee it ever the some is our $XXX raise months. has a funds year larger under of to Our advance XX% set strategies that at over to assets next up and that in paying XX That's highest management, the this and to been billion. they're XX stand are

Our AUM its that net our both unrealized increase carried by is performance interest respective strategies is in eligible significant and up XX% above various driven year-over-year. This carry is our across hurdle. the robust

preferred returns. position with deck. amount still can $XX a X carry our to position forward Page was as of years, see over working two XX% of billion Two eligible in to increased $XX carry has pay a years around that You to and the through in billion. AUM, capital of way on its seasoning half carry supplemental pay the Fast ago, now

our balance is finally, it ever is today been. And sheet than stronger

Over are distributable we realizing you're the been not several gains yet years, through compounding, but gains, seeing balance earnings. last which has clearly accruing significant book sheet in our value those through come

years, sheet averaged realized XX% at performance our return X%. look you If has and have our the last balance three investments a averaged

extreme. difference In even this more was XXXX,

we our sheet, us earnings XX% visibility of generated billions has our which This balance gains significant generated record was on create around X%. distributable As a but our return, few trajectory. performance embedded realized for long-term

performance. investment numbers saw themselves some spend very We across the major strong from pivot now our a in me investing on our and performance time XXXX. platforms Let

flagship of Looking entirety and recent the XX% presentation, this in XX%. at PE equity Page fund our portfolio supplemental private its year, by appreciated by the X depreciated

us and asset assets and about did the management. infrastructure estate the XX% funds the decline is but this class, for Our small for volatility XX%, of relatively at flagship income year, our strategy and a real respectively. appreciated under X% given Energy growth today in

solid blended Our X% alternative returning our and credit on X% leverage strategy a had performance to business credit and with basis.

you've as release, of the increase in of dividend our corporation set press we've finally, in through per we converted likely annual an when We dividends. current $X.XX a share in announced middle the XXXX. our And seen

is have we buyback stated overtime share grow invest earnings support increase. the intention the $X.XX to dividend into of XXXX, the our our to increased activities. with of For also our still to an our for while retaining X% dividends year, This and firm most consistent back

weighted-average per $X since shares cost a current our buybacks, retire program, our below share book total, over in share. $X.XX of initiated under on value we per at share, just Focusing $XX to repurchase that's used billion we

me over Scott. let to that, with it And turn

going Rob, everybody topics this I'm X call and joining touch on our you for you, Thank today. thank to morning.

The XXXX. is first

month year you we which grew basis, share was per from were XX%, made heard a Most is over well. finished up equity on Management the the course book our year. important for and of the Craig value look Rob, XX% year. As fees the we the while and progress at XX% we on return

model in including several And virtually number plus global third-party our assets and markets plus of is new balance Our all a Asia we effort. of our platforms, strategies sheet grew capital XXXX, launched working. well impact as as our in businesses

we're us. pleased important ahead topic, have So, the we opportunity progress the my me as with brings our visibility. to bridge second and an view year to of This

have years now our as can company. a public visibility XX in We more than I recall

growing fundraising of As launch our top next and months. to many X fund introduced track years, over the on additional this over several a the funds for largest to X on over strategies, call fund expect with records are And between last we of base. strong be three flagship X fundraising now quarter, next expect investor we which XX for

is In few carry up over eligible XX% and our XX AUM interest over cash to XX% months, our carried is last last years. the the addition, unrealized up

this high. Given is all confidence our visibility,

believe, management can continues environment we to we least over and continued at next we our XX% fees fundraising cooperate years. the the grow investment Assuming X by performance,

we ago, And experience. about more shared the book X actual products. value months earnings per double it subsequent conservative assumptions XXXX, again, and years, over July Day, felt, pre-tax than Investor the distributable next do over could at XX and with then share our we our We roughly

XX months visibility, these is conviction today and than able being it our progress ago. our was higher exceed to in Given numbers

our base. shareholder I to want Finally, discuss

a investor with own to and the months changing felt corporate expanding in We to funds easier has index As our C-Corp investors change more buy could you would structure universe stock. we've indices. to know, funds seen many the stock stock, about converted to greatly ago. and that XX been That of easier we've our and a to We've owning make our our case. our be base mutual added several proven significant own,

investors We're to introducing are the still KKR. new to ourselves space that new and to

is stock. not conversion full impact believe we the yet So, the in of our C-Corp

investors, new less shareholders have they result. meeting are to learned today a likely indices ours of we been in we've we are benchmark that that as be As out many and are not

families are us We and believe base our not the largest of where to the of indices Russell. shareholder next our getting valuation Russell's the would allow our of discovery our being index journey included One on we is broadening sensible and proper further is for a part goal to stock. proper price step

with discussing be when included Russell rebalance necessary to Board the the this we're indices steps So, they our taking spring. in

will We the details. posted on keep you

We thank and partnership take questions. to you for your happy your we're

And I Krystal, the if just one we through they sure make just asking could mind let our question in us all say, queue. queue, follow-up. to way a ask in Thanks ask That we everybody, to going advance. wouldn't the everyone would work

Siegenthaler Credit question from first And Suisse. you. Thank our will we Craig take from

Your line is open.

governance around a like, you terms why is on commentary at. that the terms of wouldn't shareholder you amount give thing have the as from it? moving but evaluation, in a the big do XXXX of benefit up, you what in to the you need what to rights appreciate you'll really Scott, things, nice From corporate think side Russell look in voting really at of base get do We and your small of So, flow?

me -- Craig, add of the it's first look. Scott Craig, and as Let that just take let part

think two to us it But in persistence thank about overall their well earnings and like that you've now. to actually look, for for we this First, as know issue. your buying cycles I as from places. come I incremental can on row you relates few thoughts peers a a this as asked

that know our strategies really for piece peers to of linked directly market and math First, the mindshare. you indices, to to ability that. your those second ETFs institutions are increase and ourselves our our those XXXX, to the I most funds and benchmarks relates done have pretty XXXX; that the mutual Russell straightforward, that's through and and are And

at look powerful And first. the more think so, to as that second we us, we it, the be really piece we can it's than

to going not but going and okay. fortitude, it's elbow some it's be Now, grease immediate, to take that's

to put two that step felt we next just valuation. us and was proper as get conviction, a together those pieces like sensible it gain trying So, for and

for to inclusive. Yes, Craig. Look, the It's is we're steps what take from that Scott. you our should this think take I with required Board working Russell

now we our in your that's So, expectations. are question answer the to is that right that process and

you. Thank

from Our next Research. Autonomous Davitt question comes from Patrick

income? I closed announcement thought missed I could but you the give this, pipeline of not carry and investment

It's Rob. have -- think we We yes.

we XXX where We So, and investment interest first be based either closed XXXX. are would signed expect realized carried million of our today, the of that realized through or XXX on worth we million to across realized have approximately half income. deals

roughly probably this As a helpful. was XXX time year. point it's This million last comparison, number of at

relates to good pretty of as So, exit like. it looks profile we feel at this what year the stage our

exposed to broader exposure KKR it's you update us And And is on exposure have portfolio's view thoughts more please the then, your China the on that of there? of cops. widely Could the think PE to any coronavirus? than thank. known I you Awesome, some

Patrick. and been thanks asked by could number in direct It's China. if have a our Craig of Yes, we folks, presence quantify we

as single-digit a So, in the fair our in percentage largest percentage of you a within our investments look companies China Private of AUM, the China AUM. Equity. part And the it's value business at based is when of low our of

a a So, X.X%. X% it's between and

experiencing, of there the large that's answer, everyone but to exposure. specific to the in element it human Just what obviously a again, now is terms as relates very is question,

you. Thank

Jefferies. Gerry Our next question from from O'Hara comes

Your is open. line

one for Scott. thanks, Great, maybe

being these the is Thank to I or that of you on sooner. market be months quarter-on-quarter over perhaps is highlighting? even XX some You've touched inflection that up I others that respective or XX coming you. about know worth then kind of But kind progress inflection those point don't the strategies XX highlight nearing more there to perhaps that comments, than if are back since of them might to made Investor going closer would think points. some some talked coming have of next sort Day perhaps of

going Thanks give I'll first do end. Gerry. the back part on ask to the I'm Craig to thoughts and some

sure. Yes,

So, the thanks and Gerry, for question.

quarter, coming benchmark the last expect highlighted So I Asia the Infra; we that fundraising will Asia launched XX we're and remember, months to Americas three you currently. PE, we PE know, as over strategies strategy be our that's Global and PE for

strategies have XX we be expect that, also over alongside to additional there we were fundraising three Now, the of that over next that years. noted

aspect, are overall think there I prongs So, this. a a to actually few scaling from

fund that, is pretty I X X, is to from moving piece to first easy to that understand. to fund X, think The X

This growth a with fund seen that great this its our times is example. being final we've in quarter, three close, first the the tech quarter next-gen

again, first of infrastructure of strategy, alongside as infrastructure asia we quarter part the a global Second presence. strategy talked relative geographic our of me, infrastructure the to geographic expansion expansion, close this -- our our excuse global

for within fundraising real for we would adjacencies nicely within suite Third have estate estate. that core strategies real fits be strategy of the

that's as growth touched and both And historically we've of we scaling retail or have expansion. distribution insurance topics the from alongside PE and our our well as on channels,

that for next think least see I a see X we the the in things lot combined again as of of ability upside, XX% have had we years. you've least by Scott and our those call management and referenced to certainly at all on the So, fees conviction at over

scaling and that. Again, benchmark you specific fundraising we launched one those Now, timing, of have don't see any in we've for strategies. three terms question when of would your on on guidance

benchmark other launched haven't We fundraising the for two strategies.

year good the and the timeframe, end back opportunity of number three run you that would to rate reasonable we feel we have we're period, again that first really that about steps the but in taking. very I So, that see think think

Gerry, for where thing Day have player are of add the platforms we slides Investor showing is shared is some I'd these on the that, of subsequently, relative one the largest where and we in. kind to

As think, be top X. a want on we is reminder, to business we in be we are where a path to only

we so, for businesses ton And opportunity a of been trying the scale of a make number point meaningfully to that us these to we've is there's started.

short ahead question track are I we thought of on would your the or answer we is, be. today where and we think

estate our everything that's again XXXX which When that first core the here. on business, time equity, credit corporate broader slide we then growth, we're real put focused and for up and and infrastructure, from credit in from equity doubling

and So, it I in good today or those nearing right feel about inflection really several that of are it. point

So, that's that visibility one of with the firm. conviction the us speaking we such the you have reasons on for hear

just dividend you a to, around then one some FRE increasing of us you And year? a metrics to the perhaps you. percent coming that them, just, comfortable clearly, kind you're the how it, decision of could kind in think but Thank follow-up inputs the that the if dividend, understand increase look I is help or and of of probably it's

one share buyback activity. continue of to ton to look also growth a what is where available on we want we're There's business dividends we also metric business significant our we're to the for we're the scales, but not have overtime and overall our ensured of of problem. want at. that take see additional to opportunity increase continued like. and focused believe a retaining we to our No reinvest Really, our as business specific into capital back have share amount What we we that capital that a profile looks said that,

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

just Scott, the first, on visibility.

appreciation that nuanced the outlook about went that's on thinking be we be net anything sheet. there? we up? even but like how or on there. comments predict, it your that is maybe sense that balance see to just does Like with I shift line realizations, pace? And more pick through will realization realization just tough to should sounds guess makes it pretty you relative the the good fundraising the accrued the activity, in So how the Like,

performing been Thanks is message Look, the well. that it's balance think the sheet really I Mike. on

we've As course over compounding end the the continued to what at last see see the is you policy seen year, dividend attractive the the continuing changed we from charts of just very since XXXX. can deck, the which in of we've

of we're So, balance the the the pleased performance sheet. with message that is really underlying

I getting to think repositioning closer it the targets. our happy we've we've asset we're with been that very allocation made and

according all So, going it's to plan.

Slide give how is, do be that that you unrealized going I have that about of guidance, specific the balance of within if slides that deck. gains watched the sheets. you look is what to point will tell we particular we're gains to in of think what at very make, And to the embedded we're unrealized we you you at terms and that some to look It's that much to going is the In in is you continues trying realize the how X increase. but any hard

at We're record level. a now

So embedded regular over a that will billion sheet. received several $X the we the of income within balance think realized and that dividends XX that billion And gains be of balance from that's we investment top unrealized on the other years. way sheet assets is next

is, So our would execute tell see upward bias balance I as expect continue to we to strategies. general a sheet what you

investment upward also income. So per only value not and on overtime be unrealized share, gains would that but book bias

a year comp then the on that below the mentioned Rob, coming quarter XX. And and then you've bit a better just even ratio a follow-up. little in full

continue Just scale down, to this to early little the thinking of read into trying that you're should too ratios terms understand to to the it comp had as in we that is business going lower? something like, trend you or seeing be a

last XX% of point, I'd numbers the focus a less we annual and year so as and quarterly communicated. this the year on at Sure, numbers we're XX% what starting and

fair can other do a were And continue know, low an say we XX% overall think keep target QX certainly a a to which for build we we we margin, and comp and try hope revenue in certainly and overall do comp our scale as and as about achieve that where targeting eye that a we're margin, to target. year XX% position over you that time. the to is that. at down it's us, and towards also that XX% level on wanted we thought is for margin eye close be think we margins, I our about As operating to had that bring But number

Schorr question comes from next Glenn from Evercore. Our

Your line is open.

So, thinking pipeline what's your Those they're I XXX about don't than be commentary up have to comments, is million capital me. markets mutually lower the from things interesting forward time and you to think to last And the about a XXX. but talk us. and the interesting little your worth of exclusive, they're deals two

just be deals? there And said am a just is you to the few So, trying capture I markets your and and guess the feels anything coming you're on in question raising pricing? your realizations, less yet those Or it is. down? it less, like deals. Is square keeps big I exits Is about your but those what confident capital capital chunky two. to

appreciate Glenn. for clarifying. Yes, the I thanks questions, you're

unrealized XXX it let's sheet, So, the coming and that million unrealized exit terms on carry through, to in we the be of gains take sorry, of in on To balance be that's side. clear, gains the pieces. expect

exits portfolio be basis. come a newer But or way refinancings those from part, things of going most in exits majority from And portfolio. the transactions to in that capital for IPOs, the the may fees. markets activities probably regular like or the tend or Where things exiting market the are result vast to on fees markets be from to related is capital So, secondary's. capital are fees the we that don't are

the So that's distinction first to make. want I

how on is markets we're sure that do that I want to to The lot a from business that see driven clear What not deal that to markets. you activity capital be refinancing of the or are second make new we level activity going thing make referenced. capital is that by understand trying you I And down is guiding quarter-to-quarter. we

which a range significant purely so business to a it's to XX to that's is is new large the what is in how beginning us baseline, of Rob give for terms see that confidence. And even that which a function, that XX we deal see of you And activity, sense trying we amount without mentioned.

million we this we And top have you transactions, then large that, like how of kind to in that's some upsides. we've $XXX the million, the been a And six meaningful And year why $XXX QX, for of numbers you that been plus last will on quarters. when recording XXX potentially get kind see few did that's of million averaging about we've years. eight over last

just build to with about can we hopefully the we're going so coming forward. So are. with trying that know understand results you up you the you they the way help it why do talking of And a you have are out way

terms Argos, one of going PE your if your different your on just you go pieces Okay. all anything more you. of just, on public equity press that investments on, The more get of at notion private feel curious, has the so company quickie. minority about one aggressive hold I'm and starting like a business? One there Very front. being to is you helpful. of in in Thank the in to business taking activist and is gotten how that somehow the get more I'm in thoughts on and nature

too, answer on saw think Short we the be I is no elaborating. real and just to clear articles

So I we & think investment this made is some attention. a Dave Buster's got that that

companies In and consumer nature. be made working frankly, companies nothing investments services manner. attention $X those in over constructive we billion a quite last several XX think public clear, the teams with a in not of standpoint. activists years. We traditional here from because a But we're new I sense. our to We're the the of bit got management there's of the

think bit, I press the that did frankly. a

you. Thank

Goldman from comes Blostein Sachs. Alex from question next Our

Your line is open.

more follow-up as And realization. carries and capital Rob yield appreciated growth, for Great, sheet it is aggressive thanks. capital I the you've increase it's welcome Thanks. of the valuation guess. management to the in and what Good both around as management well below the and comments visibility given I from balance whether confidence financial Scott, fees morning obviously X%, underscored high peruse given on significant your around to in guess below dividend take you business, that's bigger broadly. or your The call. everybody, strategy but dividend? the a would dividend X%, return buyback peers guys

I Alex, think with strategy. we're really our happy

you Financials So, we dividend that think basically, we yield. end of the rule, policy about I or XXX think at targeting way it S&P a at that's is to what's we and see, we're since about have say made And, we compounding fast the we been bit the level not but around book S&P that has way. XXXX, of hard change made per the was along changed dividend quite that in back bought there been And we've and change happening below. and since can a that share stock been as the we and to value bit

you compensation. the continue think that annual which really expect a us a minimum increase policy, general dilution in are used management that I at steady then dividends, is capital should to from offset share and buybacks

attractive capital those And also two that to give We us growth. very elements we of to to we and book will per are value share need so, us rate, our in allow compounded a think strategy very pleased. invest

may quarter-over-quarter, at QX X%. modestly. that at to timing it around growth. up But quarter, QX, this I follow-up in dynamic recognition reconcile of think out help And quite AUM if growth, a sequential some walk have fee look the in then to management bit fee probably that was get is you about management help and would look guess we guys it actually starting you a you see us through my up just ratio?. delayed you If to fee higher any talked Can I

that Hi, U.S. fund issue. it the the and One We quarter. had a meaningfully Alex, under that Rob. shows fees at in was management we're of and management going couple sized closed end so strategies of so It's collecting QX. a start until this is timing asset our not

question Robert comes from from next KBW. Our Lee

open. is line Your

to newer most you more which XX, are of have a out me how are running plus First over question, as the I we're it gets the of a pointed business. the you for X least mean, raising at a last years. kind of firm, as think kind strategies than years, in different couple comparatively little lot of, less made in, expanded,

investment structure to making And your had with peers? of So of change I'm that, kind you pressure your you've you're kind some comp compared have any somewhat unique seen process. to how of just then what's alter decision of change How kind or curious to your happening?

high you're right. So level,

were number We are now last have in course but a created years years. the investment over the have of those businesses the ago. multiple with strategies talked new strategies about right, as And the the XX decade, the we number XX, firm new past, last started of the we in of several

was X, X, higher ago, felt a new. years X brand it probably there much So of X, like percentage

we As we an actually number for as enterprise as on X we're point, these sit We new here of a feel strategies. fund getting the did that today X, at fund is don't as internally.

are that how those firm terms investment strategies, committee created is And a the portfolio strategies, the business, answer to had of we committees each relevant short is change done we And we've investment is that of run which so in the to very of haven't we have are of running the time. relevant long those what it. the and each process,

And was people We taking our those existing, have to us alongside businesses the comp everyone firm firm's the one fill structure. firm hired hired executives. into into help

signed compensation everyone for under. and So we've culture operated that up the structure the always

there change So there's either. no

we across it so make and sure around very world we've been all to built KKR the we those and that built businesses. we trying way strategies, purposeful do the And as

we've things on you what others. facing businesses of been pressure hasn't than comp some market would process, the bit given our really it these or expect, so changing changing some And from away are little a normally had that more structure our

highlighted is being for the clearly building follow-up, the you for potential term. seem of kind with over the, your maybe peers realizations the intermediate overtime let's be on capacity clearly to But kind there. realizations get about those of investors you've potential concerned the And to and called a

Asia, and where But so level? where is dry sense give and the and in color most may any high kind think any realizations thinking far. of a is So you there you have that gave understanding on on you can you you U.S., we predict year how for that, should the think day be your the likely next you of what can thinking kind about potential of of color what specifics to,

earning that firm a I capital seeing into carry XX that management getting the last were their number think of maturing are that show of number to years. paying carry a about, of over broad pools inside teams are the now just X those that But is understand the of we're and number it's those up the talked businesses base. carry. before the we and you pretty a of But businesses and created years

reason walk very billion. billion going of you and and XX Asia, that and base Slide to X strategies. multiple the when beneath across it. that's U.S. that Rob And the businesses could deck Europe of is of paying is cash broad different Is That part see look AUM carry the you the through XX it

think we be and the about confidence cash is rate And investments hurdle getting firm, paying this so the earnings this, have when been carry part mature these would of the watching now face. their reason and a, power latent of these have above into funds we the being we

continue And so carry would I part call increase. reason it no for the diversifying of base, really see there's that you. that's specific to team And to and out our we is continuing broad

up thing, PE add, as it's when would whole XXXX. XX%. portfolio I a in quite look one performance was overall you Rob, thing it is interesting at the one The

XX%. up were privates Our

to So the private certainly of portfolio. strong performance as part relates the

over up XX%. Our we're public's

we've the companies seen as half Trainline. that with another And benefits the are second are companies public, those our in more seen investments I so as for some investments And of it of us. relates Such that's of that in think even and SoftwareONE often like those as, and mature the again, you've year data monetization, to often point. interesting

Yes.

an on underlying and So we get XX AUM the those sheet then as up Well, are the both wouldn't the say, too in levels what about gains unrealized would record embedded what months. at referenced, I two significantly worried of any one those on is we over happens eye balance last I guess keep and and our quarter. Rob, I carried within

both intermediate on and so And an the term. near-term eye for the we're that's keeping

Our comes next Fargo. question from Wells Harris Chris from

open. Your line is

low on line Why over this Marshall I Wace fees, incentive growth the is pretty It were And has so lower guess the like questions impacted your first fees. good that by is. few incentive A think BDC item there. quarter? that sounds I part been being fees then also,

how what be attributable to to fees the So for that, incentive to occur recovered? revenue much BDC and needs is

this Chris, Craig. Hey, is

to crack first the take me that. Let

relates part they question X.X% our to And incentive of in first about as less XXXX, than it principally of fees, were to little terms your of QX. relate really a in the revenues to timing. So, total that answer does the

report on largest on hedge we partnership lag. one fund those X.XX. So, And quarter our a crystallized results fees incentive

see our we So through those in financials QX.

broad I'm S&P the So broad very markets, even a about back remember volatile. The year's to markets think XX%. last fourth was quarter in sure down you of was

this of crystallizes. QX So for bearing the impact in our ago. impact when year the a of in And felt year QX recognized that incentive fee this on actually fee results had we incentives no the and instead, that timing given

you and incentive will hedge fund of fees which quarter. Those we overall and right, that's it then incentive of from we're, is in partnerships. platforms our is tend that then second terms fees tend credit-oriented again place see get as but see to relates So, And a the where BDC platform. incentive strategies you is dynamic. to handful to from in fee fourth annually see And what the do of largest that crystallize we

did Now, for revenues. X.X% line for a that this in in it's of FSK, next publicly more how NAV their make QX. Again, topic of and what hasn't item last sense? in a earnings really fees quarters that on cautious is the few again of those the results incentive That's were that small in FSK the and expect a Does platform, our a driven we of BDC BDC terms in disclosure that they of QX you But It's for I by that said with in XX% muted reported incentive partnerships. fund yet. saw terms KKR hedge consistent think terms about you about total listed over significant that's call because to our this fees be talk actually little KKR. topic our

you. Thank

Our next from Bank. Brian Deutsche comes question Bedell from

Your open. line is

million questions in more the A to $XX just $XX lot on million quarterly rate. of a were little answered, run the to zoom maybe capital but my in markets

revenue of XX% Capital mentioned, the I KKR. I businesses the Markets outside think you from think you Rob mentioned of

stream just that or to about applies really to that if XX grow talk outside revenue $XX to to the XX maybe $XX core also million base? KKR is KKR efforts and run then wondering rate that you the of Just the

pay include That's Brian. at decent of XX range role we that Markets XX No, gave and our to third-party would business sum. we Capital those

roughly So, forward. right now, a of that's be our business going going quarter to

being In to from think that terms able of grow two areas. I baseline that comes

of to momentum areas growth that from platform and help a right comes overtime. penetration base we across up get continued that lot Capital the that line continued different think of two our be number think has classes now. KKR that I the those will of Market asset third-party will a S,

Okay.

Just just to to be Brian, clean really jump in.

Last to XX years, So, transactions. per indicated deployed again, larger year. what billion $XX a and it's two the excludes from XX total we sum about the seeing we

and So, to transactions But, QX, those don't close. in to clear, and over a they we have those XX in course the be we they large without expect that's year is million of to quarters which one time quarters, XX the have and close messages and over of some to any $XXX like something given clarify. the some

be just with trying we're transparent to it. So,

then just anywhere skewed as there then KKR and to addition And the it's of Yes, third-party that totally could and heavily the lumpy part the also been a be KKR and to the to have much would deals. be well. they really the addition lumpy within XX more could XX

an the to skewed, especially say per we tends ones and transaction, make larger be element. debt syndication where more the XX I'd XX to deals equity to are they million have likely going

You $XX have the a give of third-party they deal well, to to XX out sense. A tend as but million in just range can larger top

know the to environments want you stretched. are have just if market little obviously Scott, nicely And bit this and a valuations given be quite year comment may then moved deployment you on

You know, you your are deployment plenty investment questions to Where know, opportunities? continue better you finances more opportunities or capabilities. you in or give general see cautious you where overall see guys environment, do about the more of to

kind Yes, live. let give Craig me through I like say of level high average just is around I'd on the run we're the the the seeing world. and whole, what

misleading looking statistic. market very, at you're really are when markets we're The So that finding multiple, very a a is that bifurcated. incredibly

And quarters complexity got we're by talked valuation can growth be simplicity, dynamic, the in half got less not you the you seeing about have so, multiples, incredibly or high, the you've if multiples, few it's where we growth, last significant and dispersion behind market. left

market So, in we're other world, a the really around and parts economy. the and bifurcated seeing a this world of U.S., certainly, of bifurcated in the dynamic

price. is popular and that that overall the the so have to want, markets simplicity. to what ground be into you type the much all very do, and within complexities refining market buy of sell a is on lot I stuff theme, And the would work it a say that continuing apparent we're lot complexity of is that would not reading and but the It's which

of with, kind so what when is some the focused all on? global of a are through And of most all product area you overarching kind that themes Craig, statement. run

say, few first, me things touch let know. private markets, Brian, on I'd to

private as relates it equity. First, to

part risk at We the almost S&P related that returns of by years more MSCI reward And total of opportunity better seen over if has X look times. outside been the Asia-Pacific valuation U.S. last have X returns of the exceeded is you

figures. and have reward So risk seeing in of see you we some I that the think deployment that been

so in the that Europe Japan, And for about in almost has cause activity in continues. Activity drivers of talked time of is that we prongs. our some of some three secular,

making And recently this done We've families. we're partnerships. there of alongside as There investments tech So growth as are Sweden. well corporate are Germany and opportunities.

a Japan. another talked example our Campbell's core from company carve-out strategy, in Asia for carve-out acquired Campbell transaction. again, the we Soup of about partnerships a We as international

And I into been we've area an like infrastructure, mid-stream. leaning in think

joint Canadian Western investment course the Dhabi. the closed Abu of the So over out of pipeline we in venture midstream year, in all

as to that's relates inactive it as again, as I So markets. been well. public think area And

touched on credit, the what, this in here in and was think we I we The remarks. both that activity private in saw prepared interesting. and Europe

new last the in now The very year recession of this second in whether Scott. the to goes again a half was was to to poor, market very something unfriendly issuers well-known syndicated market back

be really will credit great and deployment that's backdrop saw this for solutions half standpoint. private Now, what back from the you in

Company. & comes from question Kotowski Oppenheimer next Our from Chris

Your open. is line

used This and was the second quarter in where and dividend over that XXX run to million million. a line was like row interest your XX income million, XX

and/or Or dividend assume So kind wondering, balance your some interest as relate either margin of I does And that recap the does on. it's receivable sheet against it? loans margin Or just carried I'm you to investment? well? could have

large specifically in your a a ballpark been dividend QX more say of a line QX run both dividend, sheet. well, closer But cases, what did they're to QX both on balance is dividend and in is QX rate be it basis, get a the Fiserv. not going what we out going has or In of I'd in number that So, around XXXX. QX was run of specific and XXXX and interested item in number. rate, of our to

of dividend you say did a out you Fiserv? When Okay.

talked we Fiserv against is Basically about did, margin what that second position. our we quarter on draw Chris, we the did a loan last

that's so to sale dividend we as was, as And kind a that some of all. opposed up shows but

relates that got to position target. a the not carried receivable Okay. interest you've And in the it to only balances anything

correct. That's

in before XXX terms of terms of, in of that's when of assume the reference or that transaction value? in terms you is not I million And in terms carry carry

end half That's think the a we realized So yes, see and January, can think, of point. realized investment that's is carry of it's right. as income, sheet I the I carry, important first we and both And balance and today and the XXXX.

yet. and it's that's will, February lot visibility why got we a this, even even So not of we

comes Michael question next from Stanley. Cyprys from Our Morgan

line open. Your is

up deployment circle year-on-year Public Markets back they Just the nicely wanted segments. on levels, were the to especially in

this at Is about to of rate right how run how would and XXXX? and all view the XXXX? characterize curious the think of elevated deployment in just I into deployment your pace So you in pacing

as I credit call around course private the don't place, the quarter, elevated it think elevated, if over year, mentioned in that's one alternative a deployed Craig number. would big our I billion, I see Michael, X it strategies, fourth did probably which, credit we you just we the of at say look

I I that If were don't be think, a you bit that to would misleading. think analyze

mentioned whole, the the the So in capital as deployment $XX of year syndicated and have last growing world. couple when given of I activity And been our look the around kind I over a billion years, and we've all at base around capital. growing we as and

to go I all expect up. you think that to else equal would continue number see

some you're strategies follow-up some maybe about new us raise And initiatives, update XXXX you you if versus guess, 'XX? been introducing, how on in thinking approach about to growth? that channel? out for just I the a just And there's talk could retail of some recent you much retailed to overall there, the maybe, sort proposals how are of just the regulatory And meaningful maybe

it's Mike, Craig.

take the first part. me Let

of net X AUM in high retail and worth the XX net billion side, high me. the gone billion on Look, about excuse from worth to today. we've XXXX So

we're worth while and just getting like look value significant, you so when the still it But And dollar is that is on those to CAGR significant, us numbers hand, that approaching one high feels And XX%. are started. than higher capital XXXX number a was actually from that about that individuals, the which worth, at net that. little raised we new platforms, is capital net of ultra in raise XX% that's high

think this It's is is do really think helping significant in I and brand that us. our we opportunities it's asset. something So, channel, we a as number about the think great a for

relates standard. of SEC's in a expand an investor, the question end efforts that couple we're of to as the the to accredited by encouraged the think terms definition of I thoughts of definition it Look, Now, there. in

accredited almost funds, as purchasers private activity investors. all can of be CCC of in to Now X our terms to-date, qualified structures are only which opposed to offered

is what actually a in of been impact little muted. the doing this of So, we've terms

space. forward, development we on high initiatives focus have network several for However, that the we looking retail and

proposed the would And think so, pool if I expand that of investors. adopted amendment, it's

we're The more retail only do into multiple several thing staffing is up be the as we're hiring to people We're I level. to would going retail add introducing Michael products high next space and a even over years. the more

so, which is to last I the time my And about Craig XX% will that think kind is expectation number us hear that over XX% raised, continue and is you of talk capital mentioned, up. going year's about of

Thank you.

Our Citi. Katz next question comes from Bill from

Your line is open.

Thank Rob the you for Okay. on promotion. very congratulations me much and on getting

up follow outlook embedded these discussion are over and about maybe to on I next the the your of Just in plans couple maybe think years. of

hold in, some sort you the these time how of it back investing comes but have from in, are impact margin scaling margin of lot asset you margins significantly. where the here? think about a more you you is scale? you're of Obviously, sort on continue very here? to tow as at Can So, up same things you're of Or just the that

Bill. Hey, It's Scott.

of Our expectations to to and going up. distribution, growth other and going We're we are number allow some our scale a areas. that is, us to to that businesses margins be continuing into technology in in reinvesting back right, will be of bring

view Our is next to our net all us years. that, allow margins over increase the several of will that

you any that general to guidance we going margin gravitate what is And per upward. of is are by that see but so, working We're continuing reinvestment. period, that expectation not your will that be to that should give se the

look helpful. you what conceptual couple might coming just more that's And of now. from a one Great, back to like like, years

can solid continue a to ultimately does of the has sheet in think become scale to you just platform, changes? your to your scale if a scaling. that where payout get, longer-term in ratio look little strategy reconsider fact And So, near balance general the you balance no been you to accelerate major said that your less sheet the term in as you part you might notwithstanding you

we expectations continue sheet we to our should be paying continue AUM. that feed while to grow grow think balance your our I

that expectations. while AUM. should a compound that I to standpoint, capital to general From going be our book think investors management expect should continue we compound value, think I your we're

it's And employees only roughly stock. Bill, thing that Craig. add I'd is, remember, XX% The on the of own

go is great when that room. everybody price, the in and you alignment to lunch of we from there that So, is IR terms stock standpoint, something feel

up that mind in kick at same just time. So, the

from have do follow-up Morgan Cyprys And we Stanley. from a Michael

Your open. line is

balance Just and in the off wanted was on deployed realized the balance much sheet, wonder, sheets how quarter?

the million of the of deployed we roughly billion a off through We quarter. monetize and through sheet of capital year XXX $X balance capital then the roughly

XXX and monetization. So X deployment billion of

that's right? And the for quarter,

Yes.

that does our question-and-answer conference from And the like conference. session turn remarks. any I'd closing to today's Larson conclude back now for Craig to over

you, forward joining Thank us next Please, Thank the with any additional to chatting with for Krystal. course, of you, everybody questions. We look call. follow-up quarter.

does the thank in program. participating gentlemen, today's conclude for and conference. you Ladies This

wonderful day. You may all disconnect. Everyone have a