KKR & Co. (KKR) 4 Aug 202020 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to KKR's Second Quarter 2020 Earnings Conference Call. [Operator Instructions]. I will now hand the call over to Craig Larson, Head of Investor Relations for KKR. Craig, please go ahead.

Operator. you, Thank Second our Earnings Call. Welcome Quarter to XXXX

subject we'll by usual, Rob our Co-President our which joined are everyone Lewin, the kkr.com. not press contain the to quarters, GAAP your To our forward-looking will also measures morning I'm be Financial begin, over are closing close we'll Global of call. Like this in Scott release, a on XXXX. that remind and GA. The filings as to supplementary to CFO. agreement hope guarantee reconciled would a Nuttall, in of until KKR course, healthy. is acquire Please to regulatory to call events call, definitive we've reminder, that you SEC signed We non-GAAP on As expected Group, to is And or our and website a like refer isn't to previous our figures Co-COO; performance. to and families, safe we the early Investors and factors that deck these approvals which do cautionary on Atlantic and referring This available which Center future early July, or section statements. related at course acquisition for by posted statements refer conditions the and to

X% the of before added and is touch website. that On Center in The the discuss Since to be structure in Investors traditional the increase XXXX, acquisition XXXX is investors our GA few pleased over this index most note our the total Russell return to our of seen base. just step are we've we family, our see the basis the supplement. from time a our and Atlantic. fund the all to GA XXXX partnership May corporation sector up changes a meet we've on fundamental investor and mutual S&P to over important conversion in transcript and evaluated turn Financials minutes, our in benchmark or and indices. results to on our this, the of of is in from to to meaningful Russell and structure the both frame an a our who call this we Also to that shareholder I on to our were a stock going available of Index XX% exclude our on we're and opportunities ownership, in introduces compared Index. resulting haven't quarterly including evolution So the announced negative going recent June while we Alongside from the we XXX for have XX, continue new and KKR section potential the quarter This Scott made presentation call Global the before. played part with results reporting performance, a

of Let's the to Page over metrics. X our key turn to go supplement

XX XX%. management of billion, indices we up of Alongside to see indices equity months fundraising year-over-year. new leveraged strong last QX, quarter high-yield up and over X% increased this billion. page, in $XX modestly over with raised. fees this AUM half can had the top quarter the deployed, capital AUM With our a performance and $X.X fundraising and has grew at Looking over investment the $XXX months period, were by the billion XX global down Driven capital you last loan

of page. the half Looking at bottom the

of significant earnings came $XXX year. can quarter. year values our also $X.XX the the That a for look first even can months. remain balance or last of book year, And at sheet. of The basis, compound the came as right-hand bottom see, to per per compared the half after-tax $XX.XX value and months, last share reported lighter amid to Our DE $X.X volatility the look be is value This to share million distributable share. X% this QX in the per gains $XX.XX the nature $XX.XX per we balance us book you $X.XX on from on up at up XXXX last the over point additional which after-tax over from more you chart. first over for shaded ago. we're adjusted half share portion, quarter the X% brings finally, episodic one to in flat the an XX relatively reported part per sheet going top to the And realized billion at share compared reflects our in the steady quarter bars, And XX last of when as

seen bottom, fees So our carry, bars, portion consistent where growth we've more and reflected in dividends. addition is the the of to interest and darker income in

look Page the of please at to supplement. Turning results, summary X our financial

quarter the up the Focusing of $XXX Management second fees to XXXX. for million, on quarter compared our were XX% second XXXX. results

were realized strategies. million were blended of $XXX Our revenues income, with equity cost. our a the it of quarter in generated realized $XXX carry totaled half a this carried Despite of good over volatility, across investment million. exits coming with U.S., firm. X.Xx at XX% investments Over realized the total came our performance the largest multiple interest quarter the non-private accomplished The income approximately carry million $XX With outside from all of was the quarter. from us, for

quarter expected We remainder for expenses. comp volatility market would low ratio, that at Compensation, million, our maintain totaled a noted Now coming uncertain equity of we with percentage $XXX as last comp, of our our XXs based an monetization again with backdrop, revenues, XXXX. once and looking comp even ratio in at quarter that total including XX%. this the

due quarter expense at end million prudent is the Non-compensation the XXXX million low $XX $XX this the quarter of which that to of is in in management. from quarter, cost So guidance. the down reported totaled second

over and lead to results turn of All translates $XXX to operating I'd million, of it XX% earnings of that, distributable again figure. Rob. And which share $X.XX margin per these like us that an after-tax to to with

all I to the is our business side first of highlighted Recognizing dynamic, results our hello, everyone. a of our I'm And some right-hand the our investment at the lot, before best XXXX. look financial deployment and year-to-date. we'll on of please reviewing of Craig, on the Page We've the performance Thanks performance, to begin spend deck. model X by over XXXX. XXXX market that experienced resiliency To our thoughts volatility compared with a then in take some first significant think going of half half fundraising and clearly time activities. start,

earnings share. is we call performance. year. broad performance to of key utilize it and after-tax DE X% a We of focus be up relative we for resilience on model. to spend to of flat X% the last One that set per in in minute through is thought comparables walking metrics for to period a such the I the a tax management does helpful per critical is same the and some and of a financial our To after believe, investors XXXX, team as we distributable up QX, were would first metric share know half our speaks differentiated an our profitability our relative of this be represent, important the drivers of

of revenues, start totaled up the first $X.X year-over-year. are and X% the half billion for year which with Let's

broad-based. really have contributions revenue Our been

most up year. first revenue, the Our X over of XX% X months management the stable form fees, are of --

monetizations several Our both carried interest has in strong year, performance investment contributor also have funds. benefited this and meaningful from a been as we

Importantly, revenue source $XXX this is across XX% which of different products, realized half continue first has contributing relative That performance year-to-date. is up meaningful balance geographies sheet over realized year. to revenue, finally, in in last resulted XXXX. of a of million be and And million to $XXX the our

to this relates it mentioned, through we our variable run as call, volatility. quarter on XX% even low last As KKR comp base, margin a Craig to same the at committed expense

Given XX% the year. we roughly includes which accruing period flat our margin, compensation, same performance comp, to year-to-date, a are last at equity-based total

spend non-compensation our the Moving related of to employees Like benefited from remotely. of most working have having we our corporates, reduced many operating expense.

In future and been so to on wherever are management team our do cost addition, footprint jeopardizing responsibly reduce has focused very trying our without growth. we to able

operating you year-to-date QX, costs pronounced expenses approximately on down where are XX%. this reduced a in basis, our can it's most operating see While

operating As XX%. a result has increased and year-to-date distributable approximately cost margin by around of and XXX basis points both our performance, our right revenue tracking is

results for the this in compared first in DE of XXXX. period for same All share X $X.XX $X.XX of of months the to after-tax XXXX per

our So earnings per distributable and improved, are our have margins most X%. importantly, up, share our up revenues are

addition half metrics, meaningfully also of some accelerated year. P&L of has In the fundraising through first the to the

to Xx almost up is same raised XXXX. capital in new period the in relative XXXX Our

full. in results Looking at our

can proving is up market periods of model Our that well it quite hold uncertainty. during

at trailing XX for quarter we Please supplement. you'll Page the look of performance X months. on given included this have tend performance. investment have page, see to we volatile But figures how Turning take the been. the on markets to also a focus Generally,

total MSCI over XXX X% months, returned and the equity XX% for flagship and the funds XX to compares private trailing return Our that X%. the of World S&P indices

very XX% the returned XX% for of Alternative In all which X% last and distressed driver combination strategies which declined a to of took in was down our performance. big index largest relative and real positive the Leveraged our performance; our over which the the over AUM, about The in and very business is LTM good meaningful XX%, QX portfolio, LTM. Deutsche and LSTA by XX% Glasfaser marks private the the months, we Our infra closed performing was quarter. This credit the up and over monetization a of had respectively, was XX estate by which flagship businesses flat a LTM. some quarter months. and X%. credit infrastructure credit, quarter, credit Alternative up strategies, is sale credit XX a credit, our of compares in had our period. LTM

value our balance accrued of to quarter, our in sheet, note, quarter. Of increased driving terms share net X% investment in increase this our portfolio per $XX.XX. XX% the balance book In our the carry appreciated

Please X flip of the supplement. fundraising. to to Turning Page

as where and Fund see finding a $X.X quarter could previous this this we're the earlier, which both us pan-Asian company a The billion XX% this initial raise the larger equity billion This quarter. Including the in per already markets. raises. around public far in X Asia a is largest compares mentioned on you page, billion, through private IV averaged breaks years, bar environment private its the Asia we private from currently closings raised $XX-plus world. right, billion record our largest show in In public is On equity good we capital to have we strategy, flagship than how capital to the fund which capital. and QX, for capital approximately raised is the over our $XX past As July, the our the for down. at vintage one is of so far raised $XX quarterly component

We continues will provide fundraise to as on it updates further progress. the

The adjacent second component, strategies. funds first-time encompasses billion, and $X.X

increasing earned X fees real that we billion, as least X quarter, issued of infra, management about the capital at well dislocation the within capital strategy. by we show European pro years, Wace, see raised finally, core in funds like CLOs achieving which which the As strategies are raised our starting impact additional plus is estate estate, all $X.X of the as credit, Asia Asia our leveraged areas also over And component. definitely up Marshall in up and totals rata portion coming now we inflows in but newer talked real now new at these our flagship and to have as goal. scaling We're to previously XX% are critical important,

one growth want significant that about had, to X. business to opportunities have biggest frequently very Page on believe our minutes is We've Asia. a Turning ahead we differentiated. we aspect maybe few our spoken of I spend in is the

Over leading we've XX region. the franchise equity the years, private past created in the

now, integrated hiring many In teams equity talent and we've been local building across a non-private addition, years number for of strategies.

Asia across to result, our footprint you're starting a scale. asset start to As really see management

come clear the the we're to our from in are direct of with areas strategies, equity. time expansion equity raised in of We infrastructure in more and non-PE like real benefiting growth capital and alternative leader estate, private and credit over some with

$XX over AUM ahead XX lot on of see billion page, has us. running can past you to increased a room the $XX As months, from billion, with still of the

$XXX differentiated page, million collective growth for the Asia Between local of the continued of this net fee rate and our can approximately alternative this coming side added big North right-hand region, the run forma years. at current July, Looking capital see best-in-class of of our management be Asia, new in has as fundraising Asia we our team, management well tailwinds business IV space turning the believe impact impact on raise. you fees. run now in pro as the the record in With in franchise really as the as economic track secular the America rate

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This committed billion has see we've evenly invested can approximately and this markets. year. public on been this page, between or far you As split $XX so private

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asset active, Our me approximately coming let it activity global of Scott. this XX% investment to that, over our with also has And infrastructure been hand with from team class.

for And Atlantic Rob. call also you, thank in not everyone, today, acquisition July. on the joining the you, call for Thank our joining only but Global

all families doing GA. you start, continuing of and acquisition are offense is during for left transaction that pick me up perhaps highly and well off, times. you're strange KKR. our I of and say example To playing This healthy, these let that I Before where the is Rob safe best recently strategic all first your announced hope year-to-date us

to closing the expect pending manager. As acquisition GA's investment we with regulatory of concurrent a reminder, approvals, and the become

at Slide can the at X of could this a of see forma. what you slide look for do see the you pro some Taking deck, our you look metrics If of the will important impact. AUM top

of approximately or a billion, to assets than a As over in $XXX $XXX all companies $XX hit asset will XX%. over our our deal, will resulting increase by AUM, billion. billion the fee-paying increases the of assets manage billion. in we these insurance $XXX XX% X.Xx to from And result immediately increase on AUM behalf of more And

pro perpetual from bottom perpetual provisions. XX% inception. our to the the X page, $XX you'll or with life will billion transaction, the the see a overall at On forma will of increases of recycling of half multi-decade over contractual X.Xx, transaction capital And of And for our we $XX billion. years by capital either have have our XX% a AUM

about But the us This to advancing and exposure management and meaningfully important will X. just a in fantastic trends provides the a firm. it for from to Slide scale do transaction we and transaction positioned not partner it's several as provide to more permanent an strategic overall important team brings GA that us So well more faster us way, us simultaneously. here. to a impact. immediate grow as the initiatives the have numbers to been underlying looking a we turn And gain Please to provide materially is believe ability grow access transaction

grow to the market The and critical of for is more what's being globally. themselves. happening importantly, population creating by retirement end individuals us has And aging wealth trends with continues areas focus retirement tailwinds. One wealth managed demographic of in the been retirement strategic an

worth over discussions years areas looking on few Hence, and high We like net our more about insurance, our to retail. access last XXs broker-dealer. bank, life have with to these of with own or you managing gain wealth the been and their trends. insurance in their help or annuities the to adviser focus individuals XXs it a retirement wealth managing sells and largely GA

and as trends So for we GA well GA been both insurance across retail. gets here, grow us grows. inorganically. in KKR of to organically And and the And from way grows, looking is positioned GA have both

earnings. will impact growth financial Notably, annual think the from over impact immediate Page even on well million $XXX will transaction be I end large GA. powerful. annual time shows of reflect us, together. year up least run operating That as of year GA's a net increases more our this increase thus add a Taking to take the to of transaction million a on the the years stability And incremental as of expect visibility. but will the at our rate quality, of So overall, back, we we accretive to metrics the is XX over after-tax have couple key be next here far. And fees minute that earnings and work share by to ramp distributable step management as our our and transaction of by all management first north current want ownership. reflects their will the $XXX of fees our financial expectation we

time our people more us to felt have lot that and provides We business win with than a ways understand. of for resilient is model some

also some to for really volatility it prove now, and out. Well, that has quite We through resilient. theme felt model to proven time be the has some been would volatility take all, it this our

stability and year-to-date, to and back months X And invested about step grown or and questions. using way record our in our balance organically, announced all near and and yet capital, sheet win. last our ahead. and during term. over we're and happy and it raising visibility as our us power in revenues TDE, a committed earnings the the increased giving scale weapon, of margins, confidence you more ability that, your take amounts scaled with those give growth to more it, even we strategic of this Putting If acquisition increased opportunity businesses our have see And think our us earnings we an our $XX period, increase further together, strategic the to the we've firm important margins of billion another

Instructions]. [Operator

Blostein question Sachs. from Alex Goldman first with comes Our

So the first question is around fundraising.

challenging learned what that extrapolate how does prospects I months? over of Now key lessons ability this some for could been growth And capital the from in environment inform the months a raise more guess management backdrop? with to this fee are XX now, of couple in we this we've next that KKR's to of respect your

lot Alex. think for Thanks learned a take the this during time. I of we question, Great. Scott. that. period have It's I'll Look,

As I and dialogue picked this prospects investors really quarter, a our we've bit during think period. up last with our we mentioned

lot lot what Xx Xx what a terms So of of And defense. of the little would discussions, a pre-COVID environment. Easily lot what outreach. about bit of doing in we're we're been offense, we're on play to notes talking what seeing, typical playing or be comparing a on in doing that's a

And those lessons for one I it's high retail, really through through in it's worth, through, think, Rob we're the is insurance, communication it's that transparency the that net of enhancing we you some broad-based. relationships. it's beneficial coming has numbers. big so us fundraising come it seeing took been to institutions, And think And really, and the it's of really it's stats. But

that I think going finding other and for a is presence this in so the communication meaningful. of And very is brand thing lesson period having we're I keep and is transparency. overall, with a big think, is global powerful time us And

a of this. can that time have an brand, during incumbency And also and advantage like period so you we've having found

to That's in X-plus of I'd we couple means grow good the that XX-plus-percent it the terms us confidence And a had path. ago of growth, gives are say that it's those had I shared that And could be time that acquisition. what the this well, mentioned organically couple quarters things we've of Global for our Rob say away. of over think felt period we -- we So a precise. even I'd next Atlantic management fees more years. hard in before taken

Evercore. Our Schorr next question with comes from Glenn

do just of So you're raises still think displayed you've you seeing in be you retail on front? and front I'm made lately, which need? retail some as curious fund that some a the products hires innovation buildout Or just suited rollout that couple on clearly you have the mentioned. where progress the there. everything in are you and you Meaning, you're better at might and

Glenn, Thanks it's the question. for Scott.

You're right.

to team that by We hiring have been that means continuing and effort. no up build done. into We're

hiring I think more to the there's on front. do

We've have We space, to retail continuing been direct the in in a team. got traction high gain the worth. net

We have platforms team. a

partnerships number around developed We have the of a we've world. that

for think us I do. more lot there's to a

So you call bottom inning, it will. maybe of the second, second if

and So we a we've got opportunity, think, ahead. lot a long way go of to

the In broad-based. products, pretty terms of it's

with So we've terms broad credit, terms certainly. -- retail private us But channel across across in based channel the is for effective products found the raising And very capital it's in the seen growth we of very also of equity, across on in with interest to. assets of we're be focused the infrastructure, that of been different one equity, it real retail yield. that themes as yields. is Particular receptive anything late

So I like areas think you'll see that. even more in

So particular. that estate, infrastructure would in real be

grow lot a of there, ways different we So to think.

that percentage. as typically a And percentage it think, top terms add Craig. high-teens quarter, a $XX raised again, any again, given of new I in teens this on stat The the quarter, to retail, And quarter. the billion capital one relates was of it's represents raise it in I'd of Glenn,

follow in was through from see that quarter So nice this results terms the as of again to it well.

Robert Our question KBW. from with Lee next comes

timing just muted fundraising of Great. and given Certainly, theme. Scott, last kind everyone's excuse but sticking maybe -- still I little of pace about -- well. more maybe understandably a fundraising, hope the with getting more me. quarter, doing everything, positive,

this some not You point? enthusiastic terms ways, now to about going assessment as as that seem, a or Is delayed it's be fair pushed bit it more in out. maybe a of at just in little

I Yes. question. too. the doing hope you're for well, thanks Rob,

we're of the we were might last that quarter mentioned we at fee COVID grow perspective push We XX%. of quarters. in few quarter, in of at do our seen be by more that teeth management we the one us a dynamism hard X-year number across our you're did strategies precise, globally. say, at I right, and a behind that today best entirely I a moment, we a But I more would again a think last just that like like But it's we that, do the time. of environment. to deployment We be bit more ability optimistic today. different tell I terms the share with feel candid, we to out -- of feel quarter line bit think To kind do given optimistic the had we've our could the

fundraises we now, So expected months to XX looking they some of from the that XX might like to be kind months those be of like from of could are more XX XX some now.

And seeing some so bit. those we're of in a pulled

right. So get you're of precisely. precise in quarter which we're terms But to not going

as Atlantic I more was XX-plus-percent by grow think to And a is also to say, reminder, time and that, confidence the all I'd today. last within quarter seeing. of virtue frame we're is a say in we're that -- what be higher, being acquisition. overall, Global our I'd of it bit than that optimistic able just before

So more couple like if we've million-plus out, to us on what rate run or would XX% fees the year, a growth, about something that of you think which you $XXX that's obviously bring XX% we're expecting if XX% of of years two. management growth top a combine said today,

with from comes Bill Citi. question Katz next Our

for a margins back coming just to moment. So

Just want versus tactical just how is just structural. much sort to of understand

the comp the as higher, business low well rate. it like of a alluded in the margins running But sort scaling as move ratio, XX% for on mentioned also to that so opportunity of like and one transaction. have sounds to the you're XXs You the you at yet at the accruing hand that both feel you've you

will thinking is the to subsequent the So baseline about transaction? improve the XX% company? GA And right rate to be the legacy that

Bill, it's for Great. lot the question. Thanks Rob. a

with So GA. start let's

I think that's we then the up. easiest can piece, and build

at We that's level. the expect associated flow high revenue through to with a very transaction the

let's take X that buckets. So in

earnings. flow so while built to They're organic the asset we on to expecting and incremental should do as growth level. there expectation we'll that into our our expansion KKR's should most is comp The very GA's a clarity, as some then resources, first we're we And to have and need drive high for teams just those we we management fees is out, think distributable some any we flow that of able going well additional Scott mentioned distributable then our think, over And GA's add to earnings. earnings. through have manager of time, additional across real our we P&L think be the and margin well. more And at scaling earlier carry firm, not

don't positive that point And a in call, of there's have specific things to of I on guidance so this while we lot think years. couple margins direction a next any the of terms our over

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

kind Rob, you realization on just gave I update like the activity, didn't hear if an of or pipeline.

just months? are But Sometimes, feeling that front? on fair you how like realization the guys you And any on the environment. sort not over do. from portfolio, the of but even And just particularly the it's companies? XX if given on you And just update didn't, next guys for necessarily the side quarter, the the of performance, of private the of some XX,

the for that's And question. one. a Thanks Mike, good lot, a Great.

QX to forward-looking relates it do revenue, there. some guidance have As we our

We expect deals $XXX from already million that are that have that we sheet are to of carrying gains been close. closed balance expect signed and or up

those go, remainder only from $XXX into up buckets we've that's and for month months the got hopefully, to we number a But X a so QX. couple have the we locked And we're in what of take bit. can today so of million quarter a that

up And I'll Mike, pick the part the then, question. second of on

really of especially a matters the time terms portfolio, portfolio In this. I at think is the to thing understand like first construction

due it's pretty the And economy. been think I global our been One the we things. well. of have different just so And portfolio parts hit has hardest performing a to few underweight is

about X%; X% leisure, energy AUM; So retail, direct is and X%. of hotels about our

get those, So you if all X about to X% AUM. our you aggregate of of

been So we've underweight just those sectors.

On have technology. the we flip side, our exposure largest in

of so TMT. in is give overall, XX% And or portfolio take, our

we of that, of an particularly a And and toward the along are Asia, e-commerce in data XX% have and then about so And is in portfolio, well, our doing private equity of further as top Asia our kind example. weighting investments heavier recovery. on

So actually we've put snapback the the that we encouraged quite when We've we're all a seeing. data seen you last talked. by been together, time numbers in since

back. the coming is I we've different that's sectors portfolios. numbers of the the And is we've by a U.S., back. of But Europe seen overall, a Asia how bounce think, driven as well. coming number constructed lot in

question Davitt line the of Patrick next Research. Autonomous Our from comes with

in you the like looks pipeline terms into investments new work. chunkier have It some money putting in of

a you through view outlook do more constructive have had you've that translate that, into in calls? that lens, a So Markets than previous Capital could

as the our we'll market, a look where the markets, healthier. a Patrick, good expectation been Yes. pleased improve a half our that challenging in we answer of XXXX, of It's in the that our finance lot especially with Rob. is half million Markets The short we lot at first on is And And pipeline number a question. spend quite of overall generating we Capital actually we business, our But we've when half. look leveraged time. the the do. of certainly year, performance second $XXX at what half is first pretty the of revenue it's was second

comes question the Our JMP Ryan of from Securities. with Devin line next

of leveraging closes? a to get and just be retail just of opportunity really the I the the new just connection network. accelerating get commentary. network framing about with important an Global better closes on And brokerage benefit? to terms bit how Are just on in a in sense And more some of will talk little the really follow-up a their once just make of Atlantic a to trying will bit of opportunity effort. or deal that footprint want retail Really once kind I'm sense focus it more maybe trying products long-term opportunity whether And is initial to the launch that overall this the and sizing. just ancillary there framing little

Look, of things. Devin. on question, the I you've for a think Thanks important couple hit

right. You're

have a to To of relationships. an KKR And We numbers do insurance the for for shared is through type. clear, today pursue in their with products channel. with last any reminder products everybody, from terms together, Global talented those of they're But and on a investment and with lever. call. or of own Global XXX our through the team and their there we've annuities form, month's to us of of well. very creating over GA types opportunity because embedded your team to relationships management, distributing a in distribution or investment point, just that for you is investment capabilities time either that strength to broker-dealers, something it think in frankly, time As Atlantic as distribute we've talked not in the opportunity KKR that capabilities product together particular new life through us their right, side an management be they kind outright Atlantic upside marries risk-taking today, together potential kind of It's to about has that that around in that's work in as banks with

those distribute channels for them. about new products talked have creating and So to their distribution together using we

But again, it's new So lever product we something upside opportunities, in numbers. together, is thought an over products that of whether any create it those can time. of we these are about KKR as neither or

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

Great.

kind you a as other percent total looking to perhaps be of capital that as AUM. moving I in how capital as perhaps GA the organic, looks deck through of some forward, might think, As to, that noted you -- or long-dated can perpetual us inorganic roughly you give takes I it XX% raise. sort up guess, of capital that just of the thoughts see insurance grow on longer-dated you deal note, of and either Scott, business -- perpetual ramping the you types total you deals;

for the question, Thanks Gerry. Great.

are right. XX% X then a clarify, of that get the our And technically Page the bottom-right big for to profits the with an so just the our to is, we have percentage also that the of relationships And way you is kind world, we're capital recycling deck, those capital period pro are including XX% what So referenced partnerships. we plus forma. the of strategic of where institutions saying extended the around you is you're the time. of AUM investor of perpetual supplemental there from XX% And we're

a of those somewhere of between total XX most life years. XX and so And have

that the gets and So X that XX%, sum X%. you it's the of the XX% -- and to it's

think continue to opportunities both. there's to grow question, clear, your we be to to so And

a billion in assets, GA total own GAAP over Just KKR in is $XX about billion. as a as without assets of reminder, now, $XX XXXX; and its of right, partner, had May of total in terms

like a able grow partner they've to inorganically organically KKR. been and without So themselves

terms of at how great going with perpetual continue going do how and or just be It's together growth flow expand that we with significant which we think so right closing. of a be There now; whether of things figuring that or working trajectory hopefully are So invested think, to it continue the is grow up X the working opportunities, we and Global our GA just that blocks, additional to Part inorganic $XX organically. assets in we capital. make to acquisitions upon be enhance to seeing, could team can they're we together billion Atlantic, would would that's out pick also we

their the and scale, we're the talked of multiple through the the multi-decade, first would of strategic And as we be virtue these there's part compound partnerships each, then they that would in dollars billions to to answer continue GA, And They good the in we mentioned, traction. of that find I quite by the and second So to of investor they're be as while, of haven't the a kind be inorganic customized. your about question. but think terms. tend large really, part getting organic but

top KKR all space we maybe grow just other for organically of to about, opportunities this what do inorganically. that talked and in on there's things thinking think of we can I So about

have have new vehicles platform, that to platform, and that different looking have number our we're We BDC ones. of REIT GA can a building And scale. to we our we we from away create continue strategic partnerships been we've

expect that to and continue perpetual over a grow, of that capital to all grow time way to can we well. as $XX continue saying billion that so And long of XX% figure, think, we

question comes from Our Deutsche Bank. with next Bedell Brian

Scott, the could you're little billion that on to level at scaling little kind bit mentioned your then X X which on over geographic you maybe, $XX now. focused could envisioning, When Asia on then you which more Maybe Asia, at dive AUM a just growth bit that right looking years, or you're opportunities. if points areas the within eventually the American and saying as you both? Just become X business next say, distribution areas could you into just are as and this up, Slide we big a of I for see what geographically franchise. give color that, North more, us if And longer-term guess,

anything to Rob Thanks have question, right. first I'll stab missed. with we a instance, be you're jump pan-Asian have in But Brian. for We the approach. can maybe a and take the clear, -- do I in just

a So reminder, actually just at in offices as are of Asia. our KKR X

have So a have and region, model. presence local we we throughout the a very

and we've now we we bringing KKR Rob to mentioned, So have as teams sourcing. we really initially of have expanding country working do but Asia. been rest And teams, the those PE, across local

but the other credit you've also Asia private starting that Slide when is of Asia got Asia we're also up: deck, in on the real X tech estate, So in look well. growth what to these equity, show you private as in Infrastructure, you growth bars at and working see

Slide months And of over with is and able to And this of we've on you this respect to raised, or So we're getting to And is of benefits starting adding $XXX and trajectory. suite execute course we've market already fees. we're product that the in this that real see -- I is, just what all to see the XX can a bringing, last in part Asia that, And seen if you so. think what as talent infrastructure leveraging lot X, next management Asian growth how be on of getting world adds at each the the see this. is to footprint that we're Rob's just of powerful powerful it specific get well to Asia Fund that you that will, plus can just the estate raised. built, how the million KKR the is starting rest

Asia And so well. and our active been and credit increasingly and emerging private It's growth North as equity, And markets is quite South Asia. Asia, real in we've assets, focus broad. Asia, across now in all equity, developed

a is We're with added, started you this that that, we're just million opportunity probably terms of ahead. the fees. is means And Asia inning, what just just -- of second lot rate going in so think, in and $XXX earlier if the say, a to forecast give I'd bit retail, management expansion say see even we not of the to we've than But it beginning. a to suffice we've for run what we do, and

that is the been a significant opportunity the on doing from with world. So we've of that we around consistent of do Asia growth ahead investing focused And in see amount here. the we're investment bunch themes a

telecom, cloud, around you lot in in whole we're addition number excited doing variety that there's of care, to areas a around when space, so the a themes we've done the other region across of a has think what of wellness that digitization, health in investment And what a about about. themes some we're other been lot tech of of and

we've Scott. on the bet the a clearly to to Asia pie good part to terms summary, started up been continue of going are and in equity a do really to able the of Clearly, in global a The talent percentage growth, than over non-private in our of that. higher at to be the equity talent. you have lot to some thing unique going we to we the tailwinds that we've look our efforts western local as Pacific. is world think what built private really level all grow add is what I part that in I in -- of as you're really Asia most especially we've next of importantly, out scale really that to been And We through markets. bring grow back in a access years on then the more that's think at think able the region continuing when And think that's strategies, alternatives I'd brand and world. best decade-plus a great markets if only to over we've do, the in on in got best-in-class bring region to able

Instructions]. [Operator

comes line Wells question of Chris Harris from the with next Our Fargo.

a to culprit So and materially, interest you talk a at the meaningful we're guys drop the think Can don't annuity products seeing organic of seems ultra this pretty growth to headwind you the Atlantic? Global why rates. to industry necessarily is low be be about sales going across bit

I'd say Chris. question, the we've Thanks seen well. for as Look, the same

deferral. demand really, together, annuity to what believe Global we is products to by savings And an and leveraging that's is. And low invest the anything, have drive how very Atlantic I of rates bit what think our we terms the in last people is satisfy see with especially product and will product about, environment. their that, their already for been and or just low separate, get they're that get the little some this of rate perhaps of working of distribution months, new And been they've of a also on through bit team over it's the can the well of in it's tax the it that versus decline is of time going sales if have course of that environment focus in create to hasn't really advisers we this what for hard but clients tax products, talked hopefully a handful view much competitive a little clients dynamic a pandemic. to tell. create they But appetite some to mind can some terms are period. harder wealth yield But to deferral then this as for how done, for ability as in we of going to managing top our their perhaps

view trend. So a last we not the few is that we're don't the -- of months long-term

blocks companies believe for share that in business inorganic by do of to a top looking to fact sell And companies moment Our view time. that, to opportunity more and a that we'll and by say exciting continue bit is probably we're it's we of And life on organic the annuity virtue the is growth that need yield. see like of things buybacks. that number even a of of of that proceeds virtue I'd seeing are use

numbers with at But its the probably And you. we team that's GA pipeline so background so little yet, we topic. for that's looking as particularly their put new hasn't of active on out bit But much GA should the are say a opportunities. as of

comes question Morgan Michael from Our Cyprys Stanley. with next

you that would years was probably could in progress terms road? and which of to strategies likely down make bit most their would And strategy-level hoping think in ones down profitability. do wait How just maybe you X-plus, fundraise you approach I the raise that? talk to have little and a the another think you're improving strategies approach product further the do your to a number bit next that the you about profitability? think And X about couple of will given years, which to out little of

the last for we've course the of as have, We been businesses good scaling question. number really over Thanks of Scott. do of it's know, kind that decade. you one. It's the a a Michael,

But across here some estate what a see sit our Asia you that rate an activity starting businesses, funds to to in I we're years into IV today, ago, But getting say, of asked into number of you'd majority think X with little like on X our II, X curve, than were question ago, PE is had our closer we years been of kind frankly, for than third bit example. actually Page answer means Fund starting is XX would to strategies. if an strategies And it real old. if I what's for we're our earn our that years think of it's to that a today. We inflection Fund have where of margins their different getting about of are the to we have now we majority -- to Because less real something X investing quite XX way X that as on I, a about level. my as run us, of a -- round of going talked XX would just infrastructure businesses Fund that of scale. part that kind

would get So variety see of do think mentioned. I think in to that tech the those as Asia scaling. like you that. X which begin have of health -- But growth firm, we're whole of as talk lot. assets a that and we'll into kind really in point those areas opportunity see like significant going And area time of to areas, slides to with would and care and to a also starting strategies real But Fund other X couple a terms the areas, Fund growth, growth, we be to. we're continue Slide upside that over I continuing to and tech expand I of our now about We're area growth don't II growth, I III. we we share

So kind the before, getting of weight IV, activity of now the it overall V; that Fund is III. I, whereas was to III, II,

opportunities percentage. have that it is activity margins. we've that our gives X a of capital really the -- Impact. scale/level, lot see our And scaling started. of a of confidence it's our a in that shifting it's to quantum relatively really And bigger GA. both the weight of would ability we increase to of strategies it's small whereas But because to percentage, ago types that's new And what's the different the we so more relative It's are been us that from seeing plus, for years behind of Rob's much even that getting that away mine, statement, And like all more creating these expansion. we're margin that's and ones,

Yes. Michael, it's Rob.

Just to add on. briefly

our things to at that Fund today. business. of a our need of in order by today And As launching, that our Is, leveraging are lot to that Even business we're at very they we analysis, have a really looking micro products are where infrastructure on that and we business some newer at team profitability. lot we even turn the are KKR existing scale in level, isn't we go there really do to that

scale largely a adding, cost built to they're revenue effectively, and so base And additional out. that's

we -- there's need there really not scaling where said, there's profitability. lot for to as that a Scott to wait achieve So

that already where hire Yes. here. monetizing to The raise We now. work It $XX-plus Michael, is billion. it's the literally $XX leveraging was best a strategy and deal just which manage we billion example, And is core, firm. inside was just single what's did not flow really person a already probably that

Our Chris from comes line next of the with question Oppenheimer. Kotowski

just Asia IV. A and couple around questions One to is III confirm. of

billion You or why still XX% the like said that Asia in mean, in fees of III. IV turned on for have Asia wondering capital the July. And I'm committed left is, roughly reason you I $X.X

kind then, wondering, Asia of has Americas a are III two that given you of with lot same level. been -- already? a And lot roughly going you've I to half guess of concurrently? the just spoken investing IV the XII going for uncommitted, So or to raised I of funds like, still have is at Or was be almost Asia are that

of kind for next also a expect we should as flagship follow-on quick fund? So the Americas

Chris, I'll that. it's Rob. take

in committed capital. capital And so based or it's our the a press sorry. not on And I'm our at on Page deployed That's XX, really release, question. chart summary and -- on looking you're good vehicle deployed capital investment our

deals And where so there spoken and committed. what don't you see is through capital for flowing is that already

quarters, in committed you're we'll been to. Asia have for IV deployed turned Asia III number based already on normal coming see transactions Asia that you'll July. our the have fund. a And that over for kick naturally out reserve right, so And But type on III the

QX that in raises in been the you're has for potential as our And fund And AUM our see I'm sure to deployed news it The quarters. capital Americas flip have so we'll fund, you'll that coming more strategy then XII from strong. that over AUM right. fee-paying around And into relates numbers.

floor time, Thank you. at any to further no concluding It appears over pass back to Mr. Larson we for like additional this have so the questions comments. I'd

any to course, your we'll quarter. questions thanks of further Otherwise, Jesse, the And continued your the directly have us help. Please you days. on on XX call, follow-up in you support. you, everybody with for for speak if thank

Ladies time. at this you you and conclude does teleconference. this your thank and your disconnect participation, may We gentlemen, lines today's for