KKR & Co. (KKR) 9 Feb 212020 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to KKR’s Fourth Quarter 2020 Earnings Conference Call.

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

Following management’s prepared remarks, the conference will be opened for questions. [Operator Instructions] As a reminder, this conference call is being recorded. to Investor call Relations like Larson, to now of Head for would turn over the Craig I KKR. Craig, please go ahead.

will Good also to our the earnings this We’d like contain which Thank fourth SEC and by posted a our Operator. guarantee morning, our like to and welcome Co-COO; website And you, CFO. not course at to press Lewin to joining to us. cautionary deck that that the or to call. Co-President for And quarter and future you your XXXX referring refer and which This healthy. related safe you we’ll supplementary factors remind events forward-looking be is release, call, figures we’ll by which to statements, call. filings morning joined families everyone section reconciled these GAAP refer Rob we’ve non-GAAP performance. I’m Scott quarters, are Investor over Thank available our Please call are on We everyone KKR.com. for in Nuttall, measures the of our everyone. on Center statements. our on the do previous hope

parts. this Our into organized morning call is three

you relates walk fourth through where focus I’m these. a to first had with a finish to on been quarter a The to we’ve our strong We and results. solid going year

well lead going changes part Rob global some on on an fee earnings of closed The and our And through includes Scott going of important per on as Atlantic And in share outlook. as offer to reporting is part the our part to framework second new you Xst. additionally, which Rob of as and related where both year, will call also February this. finally, acquisition, our to guidance the thoughts call. introduce review compensation some going, this relates on update This is a we’re

both you the corner supplement year. we success of management results left-hand page under have a the by addition raised, assets Turning grew driven grew us. fundraising management first billion, can billion. turn, year-over-year and -- fees of record $X.X see we XXXX XX% In to year page, two to our investment new upper to $XXX successful XX% to for the had that performance was capital by a In in

rates compounding AUM XX% this XX/XX. paid both compound. being bottom firm the alongside. and the side, When end remember, has at as fees our book to Looking the growth And was seen power corner, levels distributable the pace carry and XX% of value year. a per on out and grow record annual And sheet ago. more earnings representing per this the balance At annually. management from increased $X.X of after-tax broadly value per book at at bottom compounded with you to from embedded Book look value are the a XX% continued of and dividends billion share at respectively. share in to And left-hand $XX.XX, our addition in finally XX%, compound our growth right-hand gains earnings and unrealized increase X% share XXXX year for to we’ve year XXXX,

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into our the supplement. a turn of page dive let’s to the Please three deeper Now little results for quarter.

of a in for the to year, Asia. and over $XXX each of up costs. monitoring $XX in up are on quarter $XXX about fee income in key of the million. our as of be paying realize million Wace. realize years. and investment of we Notable XX% driven are Capital fourth we’ve revenues, here to at fees as That issued basis, year $XXX update performance with the our last a quarter, done capital over fees December. increased monetization as at And markets X% and on over XX% Fees reported Focusing Net AUM $XXX Marshall last exits well little is with raised income well quarter and fees quarter two this investment coming coming begun just U.S. and were Epicor, of revenues right XX% related nicely. On catch from strategies fees just X geographies, figure contributors quarter Pfizer management include from strongest times compared blended million as already period. had and of management at the is Europe, fees continued to totaled and million that by million quarterly the growth, the this diversified number from up top $XXX million across incentive transaction

XX.X%, total our XX%s for compensation margin the expenses, quarter we comp discussed for well the to of base equity -- on including now XX% Turning the million bringing $XXX apply comp to implying these compensation, time. was our low comp inside for a margin calls ratio year some and

offset million, comp expenses towards our as a comp year-over-year. process. to is from end intent did part as equity greater Non-compensation year to You modestly shares essentially we over in employees issued issued always, $XXX came of quarter at see our as operating flat some the employees repurchase time. shares based dilution skew stock in And to and remember,

per seen we’re points per the for page. after-tax the at the relative XXXX, quarter, side, fees fees increased in that burdened capital our increased XXXX. we X% markets to it’s XX%, the completed the revenues QX, $X.XX distributable share over noting Atlantic of looking basis And favorably worth you and up per PE year a So per XXXX XX% of earnings share improvement, on management on margin addition increased related More new XX%, QX full share, were the XXXX. XX%. compared associated acceleration earnings while results really acquisition. financings totaled aggregate in and metrics, of our increase P&L to right-hand with of revenues a is challenges on $XXX results proud in to continued you’ve earnings XXX And PE in all our Despite And the the for a these market billion, of fundraising, after-tax and to the majority $XX this share of on or couple XX% which basis minutes. compares operating year in raised the volatility after-tax with advance of to the reporting Global we’re see in up million capital for XXXX, of to

private year, number and of XX%, figures mature well in sizable XXX XX as benchmark, X%, In favorably X% appreciated the XXXX, here to well This its return opportunistic funds fund and and of compares funds in appreciated Moving driven to was XX% benchmark return real an XX% strong our quite flagship to Performance appreciated Americas of page XXXX. number the appreciating S&P total as gross excellent XX% major II our ahead MSCI declined X% well performance XX% Americans, X% over which the investments, funds performance. investment Infrastructure by estate, outs, be some real the its driven our strength equity tech-oriented the of year. Infrastructure our digital and negative which indices. modernizations. a which returned And In of more flagship of in indices. carve you continued World four, for is REIT had strongest a a firm. III our by see In across our performance above had

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investment year, capital. in XX% representing up Notably, $XX five us record of raise Asia in helped We brought strategies for new XXXX. over a AUM $XX to capital almost and in at XX% from billion billion performance continue Looking the page of deck, the for $XX raised raised. has billion QX we of XXXX,

to core over have has both highlighting it’s Real PE, closes GA. very scaling of Americas held up infrastructure core fundraisers And their us. of across Asia, successful us. the for on billion our Asian the with And Infrastructure raised as this in we’ve And as forma grown capital dollars final up driven billion two in pro our of first at increased top the strategies, platform Estate core our continue well in ahead in as by $X success growth new to strategy. QX, estate core wrapping as quarter, time plus new raised and worth AUM first a platform Asia raised our real of capital ago and the we Asia year from a real estate, opportunistic platform, lot for $XX continued opportunities well

this side page. of We’re right-hand the highlighting the on

the next to expected market market in strategies two at years. or to Looking the come over

strategies, items turning four on have plus of additional touch two We to XX that. flagship GA strategies, with I the over before final call have And Rob. to on top

of be effect business in historical Day, turn dividends $X.XX a And able XXXX. the us second, And we’re to on I’d To call per to the announce the and beginning This change April also see Rob. you’ll We morning we’re pleased to to with to first share dividend consistent practice, $X.XX. like for annual growth our the announced be any that from that quarter in be into XXth. we increase hope go of hosting discuss over over First, focus detail to an with announce coming our that, years. excited virtual will we’ll Investor more the join then. with

Craig. a Thanks lot,

broad of as GA Between the we acquisition while our attention provide for with that bring GA on that at July down when our co-investment GA to last to level, some increased updates. us an Atlantic, we our has a process equity February key expect to long-term the our our and desired to transaction ownership closing, well Xst. we capital have financials to closed had work XXXX. of wanted increased team. The allowed assets XX% GA oversubscribed announced approximately most considerably was raising Turning to the GA impact time. I importantly, in Global on And signing announced on We same to week, continue figures significantly. the have exceptionally primary discussed compared

on some Let minutes spend details. few me of a the

footprint, was was both and of strength with The First, well in XX%. over pension here AUM platform XXXX. terms ahead at signing relationships reinsured XXX banks from embedded between $XX in and in individual evident a This GA’s in dealers billion leader has its an it’s institutional in quarters GA’s third and block increase to growth of in AUM note, in channel, GA billion $XX at expectations. closing XX/XX, fourth Of our transfer $XX channel. announcement to flow increased strong reinsurance. where of of billion has roughly three GA its acquisitions of broker separate addition block, over particular the and clearly risk

fundamentals increases updates of on remained which you the the for important slide, six this on AUM, what impact Taking compelling. some metrics. supplement required business see the the the look as could to So billion. top half operating does KKR of at Slide the $XXX of of growth a XX% our you asset

$XXX over increase partner AUM, billion. in of XX% and on of all in now time. fee further billion approximately to our that well hit just believe billion paying results positioned over immediately these $XXX manage We we will insurance $XXX behalf are with this sheets to companies insurance As a from balance assets figure acquisition

half this I bottom page of particularly think out. calling the worth is

once. eight way, so have our transaction permanent either you’ll meaningfully strategic more does of is from base several recycling capital now contractual have billion. perpetual all with from XX% capital by XX% in And us increases see capital and $XXX As years overall initiatives of billion advancing will for now the inception. life multi-decade or scale our times X provisions. perpetual it a at And important our a to provides we $XX over GA of that

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the to acquired its at $X.X relates transaction for as or Now, GA was one-time close. value it book itself, billion

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our GA earnings. ways really that of results, there our are two terms financial In distributable remember you’ll impacts that

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the around assets $XXX exceeding announcement Given the increased. the increase confidence our target certainly in of has million the GA’s deal, since

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approximately As billion. noted $X value book earlier, is GA’s

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majority on financial our In subsidiary. now terms GA is reporting, of

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leads to nicely into changes XXXX. the broadly important this in making some related more our in topic and Now, framework all reporting second we’re compensation

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everybody you, call our you for today. And Rob. thank joining Thank

Given everything brief. to covered, be already I’m going

of comment a The our First, and quick transaction and also highly strategic for is for earnings. of our new is this base the improves diversifies GE’s team position is you visibility this expands progress. Global on a business, critical acquisition quality capital, experienced permanent And with meaningful of We KKR. insurance keeping our see scales short, we a and within element transaction. the GA number our The us posted opportunities grows management to forward our a strong working and look meaningfully significantly on partners. further industry. and Atlantic. our of growth In It development collective

Second, couple KKR a more broadly. on thoughts

part about This of incredibly beyond belief we we we and our team, we meetings. that. Day. Investor information Levine sessions Allan Listening We’ll your everyone spend think a for As growth of senior the be to today planning lot nearly talk think ways and stronger for our in the for near-term this comfortably looking in our discussions its partnership, of in more that Atlantic $X you sharing in example more is a never years significant was you confidence management optimistic time, spent path prospects. discussed we’re which also and helpful next will of to better exceed to and a week call. trust We business, reasons XX sight the And us. take the building significant just to for future. growth our and to GA see announcements year. hear on our a in forward grow line can and those annual we the We about had is will results, We FRE per plans, our ahead confidence energizing. Global it detailing one thank more That have have strategic so share why more are know time to your April we driving a of blocks happy we help In the amount questions. presentations of team, exciting, are growth understand firm’s our CEO, even

Thank [Operator with proceed first Bill Our Citigroup. you. Instructions] Please your with from question comes question. Katz

-- the the Okay. GA, Thank enhanced scenarios perform ratio being two being for together being maybe guys a platform thanks margin taking given you Thank would versus the the Maybe up the the backdrop, disclosure. super with your you at between very a walk that ratio become where and the the by is when of down? helpful. the for much ownership FRE confused down plus and down, your Rob, highlighting? It are legacy clarification, us or point questions down Could tying then, for of monetization little for unpack up And you. was the $X to points maybe of ownership just assets if time you comp KKR ratios just number versus mentioned are deal. you the realization down the I XXXX, is

based. our the anticipation monetization, -- for be monetization, that Bill, we lot, our successful more success going ratio making questions. at KKR a that is if we’re as To was Thanks would have down clear be Great. lower the comp compensation lower

into coming XXXX confidence to first that that’s and combination different Craig able and in different earlier us the was a I’d around the bunch FRE, management products across of geographies and being question call. your given future. our of achieve things a that the fees platform is really the say, referenced our existing of through scaling that target terms In out

clearly is it their to scaling and that of the increased confidence have assets work constructively Atlantic and them. Global with our in piece Second we ability of

a cover of the We see to our in products our we and of different business, clients. breadth well lot opportunities markets, as capital scale what as also continue to

we expense in that together, be comfortably you XXXX of of that management, should ensuring monitor And per so that that all when feel inclusive too. exceed add share good really FRE $X able we we to

you. Thank

proceed next Evercore is your Our from Schorr with question with ISI. question. Glenn Please

you. Thank Hi.

call that I’m let’s curious realization a active, the with at super thoughts is because Just opportunities or in even investment you balance the some only are way just have say, highs. are markets -- current your funds XXXX stacks your you it those to curious more just out are other there active, thoughts on of backdrop. how to their on more raises. trying invested for the flagship side half of get that are capital M&A

curious see that So you how on landscape?

Glenn. would and represent will that QX. sheet Scott here at million some of carry if $XXX than are Rob. as realized that of question. And terms deals sit from QX we’ve got sight probably Thanks in the Hi, are Yeah. monetization in signed and at revenue for feel perspective as line It’s revenue, greater balance Listen, look closed of a jump we and point constructive very in our here today, well. we really we’re good that you

an the we it is market one so backdrop quite agree investments. able that to being relates interesting And monetize one that’s as to that

look, say, so agree comment. with Glenn, we And your I’d Yeah.

despite is leverage there sales, Board. for constructive to are very the of to I broadly be a for though, valuation there’s terms to sales would monetization strategic the across recaps, different say, deployment. in it the M&A, backdrop lot on opportunities environment, very continue and of also us We’re overall dividends, active we sponsors, monetize. There’s there’s so

full investment number be actually through time this we that period been really head talked the we pipelines into will quite and we’ve we the as about first call, think of of a are here. last leaning accelerated by As themes quarter in so our

much. it. Appreciate Thanks very

you. Thank

Please from comes with Alex question your proceed Goldman next Our Blostein with question. Sachs.

Thanks If we time momentum for a fundraising we’ve in look in best question. like bit the taking it of deployment been for was the at long cannot trajectory from is pack hoping sounds one quarter, management strong. growth a Great. Good activity was fee we really guys. I you it’s the It more. little morning. seen the think, -- the I

could some the we like fast kind fund. -- and a the see on feels that of bit little of in a fees larger turning all of faster So, of little

of prior help of jumping-off KKR ‘XX, sort maybe we kind management for how of get number alluded that to I and hoping standalone million of your will targets ‘XX start So plus they specifically point that come guess relative for fees could to XX% us quarter kind was management of growth. bridge a expect And for then, $XXX I in Rob, to? sort to first Thanks. fees the that ramp to you GA plus

Alex. question take lot, I’ll first second part it. of and the Yeah. the then part of Thanks to first head maybe And back a your

to So us probably receive Atlantic we net few we management pieces. a the I from Global expect that to helpful break fees down different think for in

that The an across have on first will asset base. IMA the is GA’s we

with have points. there regulators agreed be not will basis in XX that our excess of fee We the

we out a those net able KKR together just We The services other charge today. will expenses, million what those is also achieve an really where GA’s fee include a expect our in exact out need don’t we investment generates part rates manager, items being large GA we $XXX those up of ramp because intend really and path the a of perform as the years couple which to both fee own large period some net from a time. but to to similar talked numbers direct generated that when revenue manage achieve to be perform of of feel those as management couple got our these be of good I’d assets number we for are over origination numbers table to paying directly lines offsetting now. we’ve that able time as in strategies, relevant a other investors for similarly have fee of investment revenue that effectively will as who higher managers well years to of that three about the say, two earlier, belief

with around think Atlantic. year And in two-thirds to know about of that so our one, which $XXX good I you half Global feel we investment about explicitly, our plus as say, somewhere I’d asked one target here and million year of you about partnership achieving

question. your the of terms In of part second

good plus trajectory have being going we our and to I’d better of feel to and feel think we and year fee say, achieve in able said the between that I incrementally ability we XXXX. I obviously, XX% growth good we’re to a ramp. about XXXX management think about one GA So, over start

our think expectation, you is we we so our but of on XXXX north that the number, specifics. should about FRE further be And as don’t guidance have any that

Yeah.

XX% before clarifying just one was thing clear be that, Just that the mentioned Rob organic that Alex percent to GA. growth on

And punch I got we Atlantic to then able obviously. you top that, it So think better Global higher you’ve exceed meet to or is on the so about feel that. of the line being number gets

That makes for Great. Yeah. guys. all perfect Thanks the sense. details

Alex. Thanks,

with Jefferies. your proceed question next with from Please Gerry comes question. O’Hara Our

store terms XXXX a throughout color and has Asia Thanks in could of Great. geographic opportunities, might also other been XXXX Maybe you. on good for capital formation channel morning. what just in in source fundraising, clearly just I you Perhaps trends? have of Thank on us capital of little terms of touching some strength outlook a the metrics. both but give think

there, I on. Jerry. add I may Scott start Why Hi, don’t think, and Craig. It’s

firm. So the increasing look, really I think in the of balance we deployment, of here think, the to when aspect many relates ways interesting

So historically years. seen the driven deployment equity clearly last private handful private and markets we’ve by in of was

and footprint real growth to in for think, that more so other given balanced the we energy. active a again region in the infrastructure, one earlier. You’re opportunity correct, think interesting in Scott for deployment do as ways, us, strong real expect points very of the to is be I to But I I alluded scaling. think many us Asia, And deployment here estate really had for for there be real us relates assets

In at We’ve is this global. significant ramp. point, infra seen busy The is everywhere. team estate, business the prepared mentioned in real remarks, platform. the the growth of So we the a

So capital at various as we the overall, geographies. meaningful I we really of us across opportunity given being look think, the that for pools have

course, see we -- continue thing across these add of other come parts Asia, the themes opportunities world. that, to of of only The quickly that these out most the part than Yeah. is is we’ve period a it And discussed. I’d more Gerry the COVID at of investment number

in number more activity kind of we the markets. of those ground so on seeing regular levels And a are

Helpful. Thanks.

Thank you.

proceed Research. Please your with next Our with Patrick Autonomous Davitt from question comes question.

My retention with shift. in in lens than meaningfully kind that morning, Good issues XX% getting you have realizations? to to FRE this are compensation in firms. Hi. explicit guess through we guys. with and years bad Does create that of do going XX% a with realization the question I or difference is people bad few could paid of paid suddenly have come realization other going ratio? worry that compensation discussions kind be this you’re do not employees on words, years that less a another assurance And your

Hi, Patrick. It’s Yeah. Rob.

Let off. me start

component important able a feel acquisition. the is scaling over historically had given of years, what our of we’re we make next based we’ve couple change management to the the like So fact see what fee this I growth inclusive today prospectively change think of GA the we this of and that really on

our we so And where on we inflection able that feel to we point downside be compensate have that at in today revenues will firm the scenarios. today we’re based fee that

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It’s Hey, Scott. Patrick.

to I visibility you very intend this Rob’s are is, internally it. we about And tell The and talking the stick well, jump question to this to could think, few do careful working is and the point let to to about potential for answer diversity where it. commit scale basic are the last on, we We’ve years and and yes. thought, Just right, change not down. and get you we know shareholders to to do we we we to deliberate plan our what we us been to people, you stick or

these or take. this deliver We all environments. comp we in the we own this confident we’re the of of firm. the over stock, XX% unless XX% ranges about to And Rob’s with announce give or partners would can Everybody So we operating in yes, not point, talked the alignment. gets

and So of years. building it we change last we’ve been right for several kind think it’s the the toward

Great. you. Thank

Thank you.

Credit question with Our your next comes question. Craig from Please proceed Suisse. Siegenthaler with

Good Thanks. everyone. morning,

Good morning.

I wanted on to to Global comments Atlantic. come back your our

So we will expand with in end the GA year year. last the launch transaction disability

annuities could transactions you So of see of expand we talk wanted that could verticals insurance could disability the I to see if some in outside additional GA XXXX? and other really about into

It’s Scott. Thanks for the Craig. question,

-- way transaction an to terms I disability in was was to book off, structured say means suffice right, it book it that in with a First was such the was book us. closer the it of annuity much we disability think, book. It a what it for and the you’re did

of was kinds So taking really want Atlantic. just to that focused we Global the risk it at It’s we prior the the on like to really as more about is not And structured transaction GA calls, the we make kinds take. team talked it us is particular taking very risks. that of risks different

change shouldn’t that any take in you So strategy. as

stay execute life on We expect In any should other the businesses for individual various to annuities, focused us posted. that the we’ve institutional never of But of through we’ll verticals, its forms. here. that to you on other change time existing of Atlantic. channel evolution and we’re the and continue the think, strategy, Never that channel meaningfully and insurance as don’t terms terms got being have Global to I plans you but in the say focused we’re what in of going the we’ll the discussed keep

Scott. you, Thank

Thank you.

Securities. question. Please Devin with from JMP comes question proceed your with Ryan next Our

Great. Okay. everyone. Good morning,

morning. Good

has business looking of past you size, I want a the can number more what or get capabilities. and really is the as question you parsing color trying over obviously of very evolved any couple how stats incremental scaled a bit of just and And on been to on business is then ask any guys context how around business for years provide for people, XXXX? a the grown? what through additional around just just platform to capital for the here platform of here the on to have kind follow you’re any markets think what’s broader expecting little versus about Really the backdrop to I’m the kind a good that,

Devin. Hey,

one. Let me take that

So really a I it’s think good question.

it’s As we of about platform, really three components. say, in I’d scaling capital the think our markets

highly geographic all are about capital today around markets all was really we’ve deployment world, that between this business Americas, over the year markets but business, got the by as pretty that over for as the well centric And a predominantly earlier. U.S. world covered skilled breadth. really a and professionals was started supporting know team you our first spread Asia, we was it The of Europe all businesses But capital talked and the KKRs capital KKRs team. out

about product is thing from really able be building the out capability evolution standpoint. to follow product a KKRs Second to

aspects So classes and as principal we’ve and estate and asset infrastructure into expanded like of structured credit. real

really as we of highly piece -- those it And is Our able approach, clients, alongside non-KKR out of cover that’s our those we really And team a capital to markets a and in approach being unique think is in recruited capital the well. business last way as to well. areas. fallen to and of in clients our has to talent of unique pools our think being Asia then think what capital the really in also coordinated speak and gone we’ve and our way aspects what cover but part able We for U.S., in credit structures. a that’s with Europe best-in-class expanding

some to real starting traction. We’re get

scaling seeing and why business. add think of business of you’re duration you altogether, that that over when that’s I that so that time And

the As over we look over above see that we the been last of years, out years. a in continued operating growth meaningful levels couple certainly few we’ve and

we become it the think about and over could excited that we’re business So outlook what time. for

helpful. you, Thank Very Okay. guys.

Thank you.

Our question. your next proceed Barclays. Jeremy Campbell question from with Please comes with

the thanks guys, the Thanks, and info. all for It’s with very helpful. great new color Hey. today

check I a guide taking in helpful. to wanted noted the I insurance. look prior newer fee for some translates bit question, FRE but little FRE XXXX CAGR, for that topline algorithm to margin simplistic growth include mid-teens Just more very to which that for a might expansion. $X then color you hoping of on target the here is earlier And plus that think get coming maybe forward? KKR with investors in FRE of revenue be a had potential some kind also to you XX%, was didn’t had Scott, going Rob, mentioned also

in growth about think somewhere So, mid-teens mid-teens, medium kind cadence run over time to together be would pieces of a these fair to FRE plus? just putting it the of long

Yeah. Hey, Jeremy.

right could a more Investor a So, about the now bit number bit firm term to see that it perspective. we of substance of guidance our a we’re we say a longer quite not growth little of in call XXXX trajectory lot got as strategies. Suffice April, young things to across beyond that we’ve to have provide from get going a still momentum what think I we and Day provide on this

growth, it’s over terms all over years not be And markets asset developing. will way couple. just fairly and our two next see the management, and think, just growers we about next years not capital robust So next we in several insurance the of a in the how platform

in an shed you some We’ll directionally April. to light astute question. Hey, Jeremy. Look for Scott. it’s try It’s

Got Thanks it. guys.

Thank you.

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

morning Great. for taking question. and thanks Good the

strategic GA and Just in value, business the growth the seen outlook. then given you’ve now have you book

about monetization or change including any capital in shift forward? how you’re level of curious, balance Just moving thinking and sheet, the management

Yeah. change. No Hey Mike.

allocation. think We’re the our year manage as about our we go and every balance we through how process sheet capital going through we to same go

return The we to first capital think shareholders. of point about is is how always

continue prepared that As share to in flat count going our to you $X.XX for noted keep know, dilution. our time Craig $X.XX. from dividend this quarter, in we his strategically to to to shares increase opportunistically base into we’re with remarks we And back an our capital repurchase of were for announced is year to over also better able accomplish importantly our reinvest to then, Atlantic. example no able is what past of transaction be this growth. type that business most There than Global employee

Mike. Hey, It’s Scott.

you as things we our both AUM, do know, We other Global of focused think over the balance sheet. additional at one thing, will a time. Atlantic Just compounding, those faster remain our very on allow compounding compounding just us to rate

change is no So expected.

Got it. Thanks lot. a

Thank you.

Robert from is with question proceed next Our Lee Please KBW. your with question.

Great. Good to I’ll my two-part. try squeeze taking a in morning. maybe -- Thanks Since questions. for

had can update base you’ve just kind pool kind And of your with robust that and traditional your to fundraising comp can part invested assuming an the I is, of changed? opposed specific question, as back known one pool on giving share firm earlier it of I’m to many approach outlook? your two hasn’t guys cross-sell to the per is, funds us one having is you specific people first of Maybe kind Global comp that how second your your really points in then where metrics robust LP of within stands? have se. and changes products and three having plus believe LP for or you are us been your penetration any and like LPs more the on first of maybe part update of The you your kind going always have

to Craig. terms We don’t level of Asia fund. but the that end. relates about new as we’re real as the LP approaching point, this in We migrates take for per very Look, question and a overall honestly, in are close we at I this to and cross-selling. thanks breadth at held number at base. investors that two X,XXX it migrate that. increasing clients. be quarter Infrastructure Hey, to the it about us, seen statistics continue I to We the client. as that fund focus cross-sell, make at mentioned love our for to first final of progress the It’s continues And fund the adding our then of first of continue LPs on because We’ve KKR. like you’re fourth up, point, that slowly Rob. the in year we investors And good products Why part of XX% seeing think, that were up

a typically adding time. the at You’re one product

client. client largest averages category of products five per Our almost

again for think in see in cross-sell as we number I overall long-term the look as opportunities for I overall, us. think we when continued of terms of still we LPs, well of see us to as think statistics. us and retail those both addition that, like opportunities increasing And areas significant So

Yeah. second really calculated. your part Rob, is about we’re question, the And no What talking of how on the change. pool is compensation

in we’ve culturally changing -- participates everybody not terms that everything. is really approach us taken, We’re the which we important in think for

how it’s the -- aggregate is about shared. it’s So more the how calculated,

taking questions. Great. my Thanks for

you. Thank

with Our question your comes Fargo. Chris from next question. Harris Wells proceed with Please

basis. million, is be to thinking segment pro that we you on should operating How the pretax a insurance Rob. then earnings highlighted of $XXX or Hey, And million number? tax forma an that rate about $XXX after-tax Yeah. the

Yeah.

KKRs statutory conversion change relates there an our prior segment rate answer tax bit low your show years start XXs, we’re we some specifically a as as basis our but see off it guidance. to to P&L in as a Overtime, time to up after-tax asset tax the going So tax we build migrate up overall to quite rate from deferred expense, expect would back. to couple no the our will take that insurance question on and to C-Corp we

Thank Great. you.

question Our with comes Please question. your Cyprus proceed next Morgan Stanley. with from Michael

for taking morning. question. the Good Hey. Thanks

equity on to comp just from now curious from changes, Just the circle outlook wanted comp, the forward, there. maybe the grow on just back what excluded comp earnings going framework equity the to that’s is for

ratio, for I so to interest XX% talk carried XXXX. or six $XXX I million also where was level about years and bit different comp it’s about just the five from different from some think you just that underpinning ago you of it a in setting how then years And a XX% was the peers. here it or think thought bit little the maybe could

So how thinking about you’re just curious that?

Mike. question, Thanks a the lot for Sure.

we it’s of comp, to look on that we’re a to understand, we’re comp at So look equity-based important continue one, at equity-based to to that as and going margin, continue component. aggregate going do it’s core to compensation very inclusive and

should think XXXX, expectation should the you we about commensurate in be firm. with that that have As growth item modest growth the of the line

I see could $XXX XX% you lot noted, different that the went on XXXX. we mid-$XXXs million XX% performance range $XXX to how forms in in comp on ranges were revenue. So, as of And margin about thought of into in our we comp inclusive we thought that of the being to the variables revenues, as million XXXX. number in a about other

carried us, same the public of the not went our effectively thought we the big about interest and at against on talent firms for of after at some just time and people that with some went looked pools the that dynamic that the firms of also XXX%. compete competitive ratios firms We framework, us own alternatives competitive with but comp that compensation number have different are public that we

XX% was to And and of appropriate. at those we that was XX% different up looking so range a thought all with factors the of coming it really

you. Thank Great.

next with Exane. Please question from Our Giblat proceed your question. comes Arnaud with

Yeah.

quick you Global targeted bolt-on strategies about to Can talk opportunities from generally, please. opportunities bolt-ons? A you. Arnaud BNP. deals? you see Atlantic question Exane growth do through grow it’s So new Thank in the see you Giblat more to And through accelerate

for number and Global we can a you question. short grow answer together. of is, The Thank Atlantic ways the we see significant

the that the primary going an doing is and think first I to focus on be basis. organic

in And to so really itself business market the two goes channels.

distribution channel with bank and The the have first XXX relationships dealers. broker individual is where we plus

you expect through So continue scale us to that channel. organically to should

there and really different QX Rob we risk relationships, to But last reinsurance the transfer there year. in which is blocks at three QX see institutional grow ways, least pension those until Secondly institutionally executed mentioned, in channel opportunities flow different we did ways also is is as $XX three billion it’s well. where

eye number opportunities it on. done those for on So say primary opportunity relationships. and time. something Global through opportunity as focus that are growing us forward. history acquisitions we’re a on. last through also be right the different consider the to your over There point their keeping board Atlantic to could then And we but management has now acquisitions now, The organically channels and of is right also point focused would is go an also that then Nothing another the that thing I an your is drawing we’re team

it’s and is could amount time distribution potentially to developed energy is things in ways here that Although, that take of in doing. Global the for jointly also products we a going good then leverage near-term and particular KKR Atlantic’s

of that so us And growth could area another as for be well.

question. from Kotowski comes Chris with Please proceed question with Oppenheimer. next Our your

so against And you the as think four have? move those of the up hits goes the fund somehow way out $XX figure kind should P&L kind the we time $XXX on over you. flowing about to it I quarters? then ramping expense But up? through assets models points points to for your is then morning basis like would upfront go expect our thereabouts there so, that and or starting six, that that’s presumably build points to presumably or Is gross revenues that since you the say, back million next see IMA, the and Yeah. expense that of that. million XX the Global call we $XXX if as see it presumably goes and And basis you that XX all model or basis of and presumably thank wanted against let’s or billion we over into should of under Good should strategies, eight anyway? revenues we how Atlantic XX comp

asset of how next And Chris. built the I years. got over there on We up $XXX we an through Look, think, ballpark. that’s couple plus directionally Thanks We net the of do. managers the bear million other and ramp for KKR to in around the IMA expenses need directly assets assumption Yeah. GA that right doesn’t the as got to through of you’re right fee. behalf to there inclusive things expenses we sheet. on investment going that investing the offsetting are Today other doing GA, balance up amount of with we’ll we’re

ability about achieve seems so to you one, all reasonably to And And when our went that XX% me, to that two-thirds XX% XX%, -- in through. plus year of add getting to things $XXX think together, number. line you’re with you as you excuse those the that math

be Okay. XXXX I slightly one to more. lower right? we your than be engineering in it actually of And back something just ratio got did kind squeeze of could will envelope I using reverse saw, if I your what the comp for methodology, XX% could around When that

No.

looked at and we at the it we outlined, if it’s the ranges we looked of As midpoint that a number. XX.X%

Okay.

balance a comped could that some assuming realized bit as Marshall could opposed with the number range sheet against that some to of as revenue, delta fees Wace And numbers. the what number of XX% in our just we’re we to be numbers, comp incentive that’s about impact think think it little clear of your gets because a and of your revenue XX% performance be to I creating

Okay. All right. you. Thank

your Bedell with comes Our next question with Brian Bank. question. proceed from Deutsche Please

growth fundraising be you to Great. of of that that. you’d have maybe been that just guess two for folks. fundraising we that, on check color just fees the the bit annual thanks on sanity would maybe level and flagship I on of Most the of wanted of if comment assuming or years then it to at cadence based just of of each a I of morning, my next So side what me capital you’re the of $X, that timing fund on clarification just level in component given to seems on large do XXXX And able of if Maybe exceed the obviously little like that? $X? and the but markets sort for looks expect Good answered, is be FRE the back least over Thanks. helpful. right profile? and confidence that questions And business then really the one the all XXXX

Scott. Hey, It’s Brian.

share of to able be you guidance to kind fundraising going with not We’re or revenue markets guidance. capital

page you on can right-hand the have strategies. if you materials, all see strategies side, we market, including I five of think look flagship at the supplemental to of the of coming the number

we of from fundraising years. And bit meaningfully stays good the so, and long think I last since to as our outcomes the with frankly it’s scale couple about environment We time good do feel as a improved ability the probably in have next and AUM here our fundraising us talked.

about Global investments nice precise put but go but that fungible, of talk in going we per very last it, team that gave the distribution We’ve comfortably guidance is we and And we’ll said, the given pandemic. in have that we fundraising we well. re Capital ways guidance all into other there $X on scale we’re see the April. win Atlantic and a KCM, can kind That incorporated incorporated on message. also well where we all year into as we not share. to then making we after a quiet incorporated that of year a had to We’re markets do be spring the and kind and a both FRE to more opportunities basis real new a in of number place bit a in good think outcomes as exceed statement could you, that feel

Great.

Okay.

Okay. Fair you. enough. Thank

Thank you.

the would to for the reached we’ve gentlemen, now closing over and call I turn of back end question-and-answer Larson Ladies to like comments. session. the Craig

We a you of we quarter. that So for to had items time impact thank and your know number attention. this everybody

the In everybody, follow-ups. saying look quarter next forward Investor we everybody We’re for seeing event. always to starting course April that, of with and available any at again Day

thanks So again.

conference. today’s concludes This

You thank may disconnect your participation. lines at this time you your and we for