KKR & Co. (KKR) 2 Nov 212021 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to KKR's Third Quarter 2021 Earnings Conference Call. [Operator Instructions]. Please note, this conference is being recorded. I will now hand the call over to Craig Larson, Head of Investor Relations for KKR. ahead. go please Craig,

We segment a Good call the call. forward-looking on at Welcome by Center on I'm statements. reminder, basis. and figures we share Investor non-GAAP press release our our our not statements guarantee operator. contain that as our available remind is future quarter refer in performance. are we'll Scott kkr.com. This report our reconciled these XXXX SEC co-CEO; to our CFO. Lewin, for Rob events our earnings joined on section to filings numbers by do will earnings which adjusted like morning, you, factors an cautionary to to everyone the or everyone. measures third to Nuttall, would And which call Thank release, refer and this Please which GAAP related morning to

And over pleased in management and year-over-year fee-related $X.XX very on our as another million. we've the X at for in up to in our high figures see Now reporting results. earnings to value since This are are distributable fee-related after-tax came driver ago. you XX% XX% as of the Book XX% Both $XXX and per just quarter a increase turning XX% $XX.XX, earnings fees share per from per growth the from of earnings of quarter key fundraising. XXXX to these third fundraising, ever the year behind is the basis. Building We're success per to up increased share quarter, on turning that share. be had reported. $X.XX with fees share we've last quarter strong of management

have to of a continue great momentum. We deal

organically, year-to-date KKR. a and the XXXX, capital raised the raised to totaled year year, Last billion. for in full record the billion, that bringing figure was for $XXX year, $XX billion we in quarter New $XX

X an of last over forward. Xx first with we all initiatives months the raised pipeline XXXX, as look raised active fundraising what So over that's of for of and we've year, we

on Focusing X we'd billion things. in quarter, third the the highlight $XX raised

in First, capital invest. across with held close markets. quarter this Americas REPA platform estate public final alongside record interesting a the the into fundraising, a of real estate of the opportunities as predecessor, basis Real than and market AUM block of strategies This markets, activity billion total $XX year-to-date And $XX to quarter, helping for in add billion. Atlantic billion its to raised our our $XX record III brings in active the finding from public We into of real the quarter new deployment Estate came Xx And markets. capital, our business. billion was on more private all the largely as we're private a and to is larger million particularly than $XX We $XX now well totals XX% deployed total Global $XX billion. Fund. in

real estate deployment. and real XXXX, One back Year-to-date, half is comprised little than infrastructure look is a platforms. of If assets in of markets. deployment private XX% more key in of total here assets continued drivers scaling real private the the markets we our deployment of

before of continued So and has growth acquisition, grew as In diversified. real private markets, meaningfully becoming assets and public platform deployment GA. the more our is is Atlantic credit is Global markets scale deployment scaling, increasing after the that

credit $XX direct to months first private driven little that So and a as by as seeing XXXX, X with the was in sense, here billion. finance. corporate increased both the a total last you're increase a deployment has deployment asset-based over step-up you similarly, of To opportunistic origination well in $XX give Through billion. year,

we're and X doubled, has year. only into deployment more the months than So

Now call additional to Rob? walk Rob to some I'll turn through the details. over you

lot, a Thanks Craig.

as continue continue in to our the strength investment generate deployment funds fundraising really front, and to performance. see we Just strong relative

respectively, Our XX% the X% the portfolio funds real XX% while real continues last in the combination respectively, the with side, increased leverage up LTM, and X% time period, and continued partnerships. public last the the XX%, X%, and through, billion, XX% AUM the really raising alternative XXX%. markets increased respectively. on the Infrastructure well The over and robust to well, went LTM. really over equity perpetual which in and XX% the entire long-dated estate X% perform funds as that close and has PE in flagship months. and and over now both fee-paying our versus And increased just either quarter to LTM a our $XXX comparing X% in XX quarter funds quarter credit Craig much yielded in performance, private our as That's investment quarter, In this or to the relative this state by of X% assets, XX% And they're strong opportunistic appreciated by capital up over year, of AUM performance by just and When now up of our AUM paying billion. totals XX% fee and importantly, acceleration AUM, capital last is is up, XX%. $XXX the our quarter. AUM

now X billion $XX billion. Just of of $XXX number $XXX this It's ago, was our billion months AUM. out almost

weighted change on fee basis when invested release. can earnings of or the online is Page XXX either the capital paying comes the transformational that points it enters period. becomes capital of XX You investment this its our have growth relates the to over committed base, of composition capital a at our of finally, see billion as average currently AUM rate And $XX in and we and

quarterly Now turning to our P&L.

versus fees Our same the management quarter over last increased this time XX% year.

strength constructive Net driven markets totaled a have capital continued up were their the franchise, versus monitoring on last XXXX fee and combination our funds call, $XXX have rate. growth PE really in transaction market the the months, core us up platform the the is touched basis, which of during raised generated earnings signaled expansion million stemming is months. for in period. were QX share of was On million, third-party newer quarter is around Investor at we XXXX of XX% fee-related $XXX from growth which by XXXX. than real fees gains. saw the coverage, run a build-out primarily April that over same We And The capital transaction brings a of versus last we management of average per-share various this markets our FRE driven As including business. XX% quarter's the all new areas over meaningful fees our This and the many XXXX. the our which hitting to is $X.XX our asset, to on which future higher remain growth XX% last all XX and this quarter XX quarter, time capital Day, by

realizations. in Realized we in quarter performance unrealized $XXX additional realizations. quarter Ingersoll-Rand to our the driven in in monetization very carried and came figures, for have driven for Bountiful, $XXX investment interest with exits on exits these million by That's billion at gains of Flutter. Mr. on interest both Even from we've to embedded and increased million Cooper the the $XX by income seen and income Realized healthy Moving investments still of our strong totaled Academy. generating since embedded embedded $X.X record all the gains P&L. revenue, billion. to gains unrealized $X.X been balance while grown billion, levels Gross has year, and almost which increased our carried Coming that's sheet over to while our of start XX% investments. the back happened

bit year. investments the segment asset operating with Atlantic, numbers million, strategic XX%, earnings our Our the strong In for operating in sale $X.XX And period. investment per up our up performance LTM insurance Both at the same together distributable billion net are of the at operating for income. XXX% after-tax bolster totaled quarter earnings management versus prior quarter, total, $XXX of last north is and period. came for driven were Global which respectively, helped $X the quarter that from largely share XX% by a core the earnings $X.XX and X

a $X.XX in XX% strong performance. that up investment sheet. Turning share this an and put month for most to for business our for last one, came which the across to our deferred we result we our really our at these to announced that that believe $XX.XX, do perform balance noting ensure level to our for associated board. we in which We that includes to up all Book well to reorganization opportunities we're driven by things to tax next unique we and the was things work. and increase quarter primarily sourcing corporate back investment high are year. keep liability close with coming we at expect are set Number the worth summary, It's year-over-year, the outcomes per are to capital that value future. doing X optimizing really In matter

Our year-to-date deployment X.Xx. up is

have of our and opportunities Our investment all distributions basis been substantial our well And many flow record these performance and to P&L. flows have points of first of peers. absolute billion point, proof outcomes. financial clients achieved. have have strong, shareholders. seeing of both levels relative up have on $XXX-plus through finally, and clearly performance, to And we for our exceptionally an I delivered us you're we this business our greater fundraising us for year-to-date us enable conviction allows think that has abundant, been to Because monetization future. model monetization our our to and X incredibly we And successes the the the is sets this generate that

these also about have Days points. Investor on and on We calls talked inflection

seen an in has a shift, point, its operating business overall inflection level. fundamental Our

be turn since let they've fundraising Scott. XXX% just earnings the have is up distributable are We Xx, forward that, up being future. Xx. been this up sheet increased couldn't And it is best in Xx ever any to excited year. year, more Year-to-date last our our the over our the balance embedded last gains with indicators shape and really by the Beyond of time me in. approximately in approximately all about AUM in

quarter. you, Thank a Rob joining numbers, job everyone, again nice for our this call and Rob, today. were and walking which did our you, thank strong Craig through

on So to focus I'm how give time of few strategic a my you progressing. sense we're our for spend and going areas

strategic and perpetual is capital. first long-dated The

aspects or our and in billion The A power in scale to expect Today, over X XX%, believers or of compound was big capital billion ago, we are $XXX will that $XX recycles, the can billion year long billion, attract, AUM. business, we that is AUM. know, the XX% $XXX more total all capital number strategic of is $XX the in term. year. we our compounding our perpetual of and AUM you As faster including perpetual

we and months, So we've Xx XX seen nowhere a over near done. are in increase

a We generate and forward. have to lot more new perpetual even going capital efforts of ideas

strategic The second big focus insurance. area is

at As a in from Global assets grown billion Atlantic to area. end increase. of billion materially advance QX, ago year this a $XXX you the XX% know, GA have $XX

billion our GA to today, billion In $XX to grown seen billion $XXX together, addition, in $XXX third-party XX%. a we party an increase year increase and insurance Putting increased AUM from insurance an billion or a GA have pro AUM third year ago clients our XX%. has for from from of $XX of forma

in of a While in this growth and more lot the with see keep significant progress, in GA mind, we're pleased for February closed we deal opportunity insurance. the only year

is area The focus private wealth. of third

we've years. raised capital investments XX% the brand making, with to know, the individual that few ramp have over the our believe several XX% last next years. with and the we As to of capital investors you will number we're raised of We combined the to performance, been that XX% XX%

and and we're wide think a in that talent, are data for are incredibly positioned. sales, us, for opportunity digital number and creating of investors. democratized relevant big This well investing We a more individual marketing, products we are is we

So we small we from over and achieved where next the of the X-or-so share are more confidence the again we've the QX clear $X can that $X they short, over only to of an the our happening excess initiatives us KKR years, earnings, XX long story others but of per part the including months double than story a firm. give see FRE what's path These last a time fee-related over frame. of strong, numbers tell at

see to been questions. So happy we're lot more while And recent we has with exciting, growth that, take your ahead. a

Sachs. Goldman our [Operator the question Instructions]. And with of from comes line first Blostein Alex

Great.

the maybe $X where left So Scott, again you doubling to we'll pick on north business and a with up, growing FRE share. of off

sort of on there, or of outlined, partnerships As you more? kind that on to be zone think channel, product capital go flows that XX% to initiatives maybe private this little it's can bit XX% how As Obviously, have and key to in update the insurance ramp are we perpetual the part we what KREST of out about an key market? about that you're from kind just you wealth through tackling private a of distribution you is thinking wealth, key whether the get else that. would But considering? good so of the you maybe

incredibly Thanks think taking the step Craig. about and to democratized -- really we positioned. for asking it's private introduce well we Alex, opportunity a within is tailored back, think we're wealth products massive,

we tailored we've individual broad multiple on solutions about to billion X Now as And solutions have total, raised platforms that in are are review, bespoke well that $X as year-to-date. for platforms.

a month. million So raising we're hundred couple a of

as and on steps with our started, you So we're ramping. here. know, getting We're focused just we're pleased first

I as that relates broadly to ramping and sense want the the it made to maybe Rob, parts have. do Scott it on? So you momentum the touch on thought to initially add or democratized we

Yes.

a I'd I Just Alex. couple of appreciate the things question. add,

Craig others classes. that on real credit, that estate, products we private working a on asset have, today, of As we put we in And we're category, the have across democratized number this focus equity. different mentioned,

In more addition to fully democratized Act, into those of kind 'XX that I'd zone. put the

been of we've that funds to a in sell we money I that of individual it's also has from our past, raised channel, total which wealth big XX% investor We is contributor. through broadly about number as another private have mentioned, defined. platforms, the And XX% been the actually

significant us XX% ahead. we it what Craig an where critical. upside Though XX% of will number think early, over that really -- it's to a we're I lot growth why up That's still is guiding you we for is of mentioned we see time, amount XX% and see move to here. area that a to XX% that think

are In that front and the around to invest time, to addition We'll expand share in, platforms with own world, creating building continue your team. we're to wealth external managers. to our on point, creating with in building we team, our to more you which own we have partnerships, over partnerships addition with but

comes the question from Bill next Citigroup. of The line with Katz

on Scott, Congrats, Okay. promotion.

to bit there retail? like coming your to to maybe scale a question. and can lot on other in part But on capital? Just Is of a yet back annuitized embedded think commentary continue that Alex's I expand there more business little you out just to Are do perpetual opportunities that more opportunity?

words. Happy to, Bill, and I appreciate the kind

I our institutional think different of across a see it of we the There's channel. aspects business. number

lately think I well. wealth, but capabilities build-out continuing private of institutional of a our in on there's to as invest the we're lot reason focus for good

example, seen an institutional a we've just focused So there and as fundraising. XX% headcount on increase,

some we're going you're partners to it continuing So institutionally I to to where long-dated think about partnerships, see talk recycling. with

see in in will our terms the individual answer on to and where about the talked growing what Part could variety of further be it new And we that's where capital just So working course, private be question. actually to the of of our channels. be duration in of of we designs investor. new the world. -- all to different part your even will Part of of we it, around going base structures we're elongate insurance a then opportunities wealth

think I hear you'll talk of different world, this us going about forward. opportunities continue bunch all the and a across So to

to expect $XX to here great but progress, forward. billion the So $XXX going is progress great continue make to we billion

just And follow-up for quick Okay. Rob. a

the quickly where And sort guidance pacing of of than like through even guidance. sort appreciate raising, but last level pace it Can the play next of we terms are FRE years, maybe how management just capital seems pacing I the to set are double how ongoing few set more fees of the to your over the on So in previous you against goal? over of then might XXXX? -- that broad

question. thanks sure. the for Bill, Yes,

that at we today X think much we're than XX X XX look some much momentum on months I as look, been. And less The performing it's discussion that over so how expectations. could But the ahead retrospect, we piece you fundraises them Atlantic as of fees, balance forward or it sheet. all if to did, now different we is to assets revenue have on or has time, from the good in are unrealized going all Global ahead I the on guidance same last far have pertinent fair to it, conservative well the of also at And ago. months to is in but last you our capital pretty close momentum historical of is more we of even our be. think the business expected think, billion The business where really our markets globally, I $XX growth ever our it's in gave of side. of the or

come to billion here, we where that on And so year-to-date. around if your capital growth go can the $XXX think pause of you I question should we've raised back from

strategies XXXX ago. in think you billion the economics that majority The it XXXX. this only hit it If weren't neat revenue about of beyond. raised the AUM in small so that percentage we is that on we and and a expect is we've of of from even other going very has point XX% in the to that capital X vast $XXX And of our come be it, from far years P&L has

on that real we of the piece capital the well. base, ability So from very scale as to there is think,

of number, so FRE higher higher $X.XX of this we that if level we've still got we than off XX to as where LTM ago, our earnings full sight that or P&L, time, execute higher strong that double is were really line mentioned over can off circle and likewise, $X of of than expectation base And in every the period the our expect base. period, more the earlier, that that we forward also going while we've at looking double the we we well have to of think Scott clear a plus. full back ourselves, our bringing months execution same X, going maybe I expected picture what So distributable that even at you today delivered the earnings to

across growth thinking And so for hopefully, picture how gives you Bill. broader that a about platform, the we're

the from is question next with Our of Evercore. Schorr line Glenn

one. like space a the or There's need. feels strategic transaction secondary lately. quick X a It in One

you great Curious what your as For as versus in point plans you're doing, for organic greater. build do can area. at on are inorganic this that

Thanks for the Glenn. to report question, today. Nothing new

could our continue we assess of own. whether build with whether We to a or that we or someone buy should meaningful all portion partner there's or

partner As we've and past, we something a be a lot the talked to what value-added about to something space secondary It's co-invest we somebody is adjacent the or we think of in do. truly distinctive. build could

spend with but spend but to is we're today Nothing a So continuing however, you there. it's not time new on. have we that to it something to do, time share continue to

on. Okay. up Maybe follow could we

a us couple -- break as classes about someday. in to point, years You Asia see be of the as might in bit in have the what comment down past Maybe institutional as little teased could you retail, next to opposed expect with asset big franchise, we and might growth the terms the more a which of being at Americas. more the some

an billion Asia, The Glenn, continues to in next Rob. in real we've $XX a that will first-rate from region. position moat a probably really, equity around of where in very But in teams our the of far. part up markets. private infrastructure, that private private of those we've what and and across we're close around And think private between business with up be competitive Asia still building growth marriage competitor with real lot to marriage we've X size We think going franchise competitors capital do the estate, growth got equity it's for the catch in fund, of best-in-class built somewhere forward opportunity what the we're market-leading the world got biggest equity, X in here equity. advantage it's We offices we the bunch the investment. Yes. that side growth capabilities we Clearly, our have market. real in equity much global for the alternatives of to double it's the a in think us requires create credit, franchise our things doing like a a a so areas under-addressed

how over about continue to as we're business one big So Pac day. that, as we we feel business our really our U.S. And can believe time, good be Asia situated.

is with Lee question next line from of KBW. the Our Robert

Great. Scott, the also, congrats on promotion.

you've But maybe is about riff for Just business that Could market, maybe maybe for secondaries of you as as a that us talked Glenn's of funds being update on really of a like mentioned, in your there's and replacement a the he lot to initiative question. M&A, on kind a replacement bit how little action CPS secondaries see a as that. fund you business? progressing but or

for the take to it, Rob, and thanks Happy congrats. Yes. Sure.

So we talked while, customized stands a but CPS, about portfolio haven't it for in solutions. it and

a to private of after we a to observation try bit business exposure on more equity get this an of to built get outsourced institutional not particular, a a big So pool team in back trying of equity, is of and diversified to were the team to did private build a number the and wanted investors that that and but exposures. partner a have that solution

business at partners KKR think combination investing in funds a a best-in-class their co-invest. so also party, has which we and team co-investment. looking built And and And has the equity funds third of their private

the a quietly continued investors with business, that has we'll business around quartile perform of more scale the so billion continue and really $X about to has and world. we're to AUM nicely. And top getting performer. It's quite And been now traction

keep continue for and So we think performer a you time, it's get bigger upside and for that we'll will real posted. nice an opportunity us to over

inevitable question, capital Great. And management. follow-up, then the to on a I guess, maybe going as

on got from a huge where, gains amount of rate. investments, about, tipping can than of at balance businesses a or it, fulfill we've dividend a enough carry call kind higher think needs it's -- sheet higher capital, tipping greater Is got amply own hey, requirements of could you've growth be point towards your whether mean, do maybe embedded generation or growing cash that the start payout there or Do more the next you I So somewhat a buyback and you something? of feel we share bit shifting approaching like and years? couple capital return our little that point may

Yes. I'll start off, Rob, and I'm sure Scott will jump in as well.

most allocation I has been any that thing important to our make And think capital the to to consistent. capital you're very framework based. sure always ROE is approach allocation much

of And we're an and appropriate shareholders what's investment KKR back return compelling our to to ROEs. so start to able that always balancing achieve assuming into capital growth, it's going with with that that level

that work over outstanding our going almost do to look shares or first employees through the point returns going last of of those KKR years. KKR. we'd we is areas XX capital do feel grow close want of is really We'd one platform, So free the XX% continue approach look to we've one core will KKR But as the of million dividend QX are, close we said ROE a And shareholder X here about going basis. largest this in what greater competency then way. really to to we're policy body KKR capital X, in consistently year. group, take of any let's We in we're into we to X stock. is do if the that that We'll We've think We of back the evaluate buyer that we'd continue the on in time. a evaluate we're to to And do really of be And said forward, our to that for buckets. the order. shares. aligned next and a able our today, I KKR finding to of to growth. annual That's It's We've good of continue do opportunity. not probably invest retired it. look to our float. certainly highest inside over repurchased important XX% most that to move an shareholders be think to have here around to how I of to The

And there perspective. very so -- to our capital base, comes we a as obviously, mindset how allocate think we from about the aligned

thing would -- really add if whether reminder, clearly The balance only it's it I our a now the allowed the lot years is of and we a balance in businesses. to organic XX. at X the sheet in investing build. as And back fee-related new we businesses, how sheet, you ago, step we're faster, look and Yes. earnings were in of has us seeding The we're accelerated has do XX growth terms to what trying grow

scale markets we've and M&A. powerfully, more used meaningful Our to perhaps, we capital even markets capital of business, in be way but the balance to growth model, able sheet the as you know, operate in capital-light a a

think if to fee-related and able you our into to we've TDE. been sheet use Global If there, convert sheet balance about earnings and Atlantic, earnings you partnership Wace think Marshall balance about the really

as it, Rob, weapon. view a we so And strategic

of level we'll being point, the point way. vantage So as continue with us that way largest reassess try it we of see to to Rob's it shareholder. think and the right that to then use to balance the you'll can and get continue buybacks the And dividend and

Bedell the next Our question Brian with is of Bank. line Deutsche from

Great. Congrats, Scott.

drivers be fundraising versus -- to as would a even on insurance your sense your flag be couple successful maybe if of as with And that some fundraising, Investor compared back wanted already? into we Just -- get the blocks? And way a what just move we standpoint 'XX your here flagships Day. is schedule you've for possible of obviously of go given XXXX to to ahead it raised of a for just ignore the that year,

I any things. don't guidance for help try start? Thanks don't me updated for frame have Why Craig. let the and it's but question. We Brian, fundraising XXXX,

continued the the this reported of really our is a the years quarter meant in we think increased what across what seeing have is diversification one of equity. in big strongest is this if would X scaling interesting quarters the I of private X or had kind it way seeing ago, we firm. businesses and in history, event in fundraising you're fundraising you're

we're today, an capital so raise new reporting And excellent figure.

in the is figure our raised of that we coming in is capital equity. history, outside reported New of from quarterly and private second XX% highest over traditional strategies QX

So real estate, private capital raised in half we was it. infrastructure about markets, in the as and talked

all these new We initiatives. have

ever even the X the of meaningfully As again, have Rob AUM as time mentioned, exist In announcement. years have capital areas Atlantic, opportunities all when expected would on would framework huge come. been democratized you that ago. within market touched And where mentioned, XX% of with you being we've that's of like had these the year-to-date raised think of the on above it at didn't addressable we from products, firm Global the

feel don't So there's figure updated year, we're just like an we exciting. for but real is next which to have continues well it positioned, and momentum, really

to something coming is lot out to Craig we got market like Brian, thing only I and ways scaling a is, what we different diversifying. as time to win it's have XX The items. now. I'd line really of the firm said, next counted XX Yes. XX look, months, add, in The Last

the in there's products away Atlantic. that's from market, of different So lots and Global

guess in if it. then down, of target and that's in capital growth the to to on couple same And comment moves of as plan It's sort $X? an substantial mean, had above That's to on on course, about XX%. -- over a of ones, moved as march FRE, that channels? is But FRE up component that And some that retail -- but addition it's that maybe the that the good we think positive towards and question institutional could No. areas, what see I your business. incrementally traditional had being XX% growth. also the your Do markets you secular that side, $X I to Yes. you traditional a into is of that incredibly and pretty driver powerful.

$X. opportunities substantial we much first than see it's on $X be I of would look, in think in any second it's the us that gives and on do wealth should wealth think confidence more the an I the focus to try opportunity private have retail, expectations. that we'll confidence is years. us more think you give we question. excess it question, of to X-or-so outperform continue And opportunity than the in And more something I think to in excess better I But private today, on,

is question the line O'Hara next from with Jefferies. of Gerry Our

competitive dynamics could Seeing transactions within encouraging, a insurance annuity sense the quarter business us bit Great. and that in end. give the but of kind little perhaps your from block are three is what on obviously of you just the

Scott. It's we we it Look, a have -- Gerry. is Thanks, across do. competition competitive that everything and see environment, we

smart They make. pick smart able been and lean so pleased be tend And have opportunities of able responsible, think to We spots our we've to lot a in competitive have advantage. on really been competitors. the competitors, to we we been we've progress and we've a where with clear

the key built to relationships these around that's really the nice of and in team. really have all mentioned the world partnership us counterparties, the past, they the And to the of create blocks. Atlantic one lean Global reasons we I've that into strength with As management with different is wanted allowed

been flow a yes, there's so And of activity. block significant

will We expect continue. it

We and expect share. expect we'll continue win we will competitive, to our it be

perhaps kind if fourth the would, as of activity, in line give know we're still here always, might of you or Fair that early enough. monetization of sight to one And quarter. us any able sort XQ update for appreciated. days be I But into be Rob.

Yes. No Gerry. problem,

early good $X figure north right. record and QX think, levels, revenue. into that billion. is Size the really I into already You're of of and now, in turn monetization activity, we visibility but we will of We're have quarter, into

investment across our that's income. performance So and collectively both

have As this signed note up from already a reminder, close quarter, deals be that booked QX. through revenue in either is and already going figure expect QX, been are we from incentive to fund I'd to have been for today includes or our fees that this hedge also for partnerships. this also closed that

could to comes income how would that it's profitability, flow-through slightly interest terms now right our income to split towards perspective, carried hedge breaks so as well In you both the as I relative fund from think from of investment that down performance a say partnerships. weighted about probably

to same XX% investment you XX% recall, our has comp the as the latter If load income.

But strong of So for what's another in quarter gives ahead hopefully, again, you monetization a QX. us. that flavor

with question from Ryan is of The next Devin coming line the JMP Securities.

McKenna is This Devin. for Brian

to on the embedded on of sheet. so realization billion just net of activity, unrealized $X balance follow up So billion you have about interest $X carried gains and

you continue business assuming through time? think realizations of can So how quickly work you and this over do trends remain be to markets the pipeline healthy, capital open

than better that record we've And a And I had seen embedded grown it's gains and you've through monetizations to had year. what of our we've XXXX obviously. unrealized believe balanced. while we're our is period our for even going And is -- a and sheet. gains monetizations Brian, in Yes. any good we've I in still from revenue far time, be so our question, full -- levels year-to-date, year balance

think I from that comes investment performance.

really look as forecast it's we down performance hard feel even continue really period level the our can the in a execution, to years investment gains generate portfolio keep we'll able consistent construction at healthy of for be you XXXX, about, obviously, gains to here. future comes balance and to place. in we it unrealized have our grown. place. think a and especially to -- monetizations levels that I a from sheet you've embedded seen continue even of we in back But in lot the to time our good pipeline volatile and XXXX, of So if we of strong have monetizations future, generate think But in given which

value confidence. to Rob's that monetize. line that the of think continue can and per But Brian, kind before, terms I a replenish We confidence, to embedded we of investments gains unrealized earnings to having and Rob the share. have in Yes. double years. other carry would addition with X-or-so we of reason in is thing fee-related other in with And add, obviously, The And you do as we'll perform. having do only we part next hopefully, in we least both at same earnings that, sheet sight balance gains to referenced the of point, heard can we'll continue distributable

in just the the to margin, about FRE the stepped half quarter XX% that XXXX. then on up in And XX% Great. first of nicely from

we should So FRE about XX% good forward? think that how a Is moving margin the place to be?

probably What XX%, XXs Brian, thought line where kind to technology, intend We also of we'd year. a about last marketing. talked low QX, Year-to-date, across invest about solid we what we've is to we FRE is we're flagged a in XX% so we've and be. were even margin. with historically continue distribution

to of be continue And low up in sustainably range. XX% go place be margins we're that mid-XXs and goal But the you so see ultimately generating periods the over in at will the forward where be hopefully, in our that a are years I going next be to is of think And OpEx there types that could those of generating But the where time number a FRE margins. a forward mid-XXs. up line where more of guidance sustainably ticking bit. types going will place can we're

next Cyprys Our from the from Morgan question Stanley. Mark of comes line

Cyprys Mike Morgan from Stanley. It's

could distribution, marketing, can just distribution, wealth hoping the the do next elaborate on years? buy sales was couple making Just how bit digital of is Where elaborate a rent? today? that. sales, the team you do you're versus a you wanted just I you opportunity. large build up versus private over you in bit little the investments about How be could on think little think that on And to if follow

Thanks, Michael. I'll that. Scott. take It's

In making, first, the of investment making we're terms the that investment headcount. is in we're

of so XX-plus people. here it from over ago, around term. relatively that the now will months kind probably XX. number or team, expect would again the So was near It's XX probably pushing I likely triple

So to will wealth team service marketing. the best-in-class be in in we'll investment private wealth client Investment to operations, That's all sure things focused X. around build able of and including we're making tech out, way. a X kind the continue that private

investments we're to there. So make continuing

You heard to going we're Rob investments in continue referenced to some technology. make

that space. I to be X which is those the about talked Some of addition But what around development. are in predominant, will product the before,

is rent could to right we'll let and we're and we if make partnerships, we as think find In we now, into buy. efforts, we rent, know the create sense part renting our sit build move you terms building, of are, that enough as to category. are is clearly and it interesting But that buy and anything buy development some build anything of today. versus doing whether there's here versus we assessing corporate And

thing one to Mike, quick on. Yes. just add

would the As on important range space the note headcount expect in our to we across XX% think firm, we growth stated able in or about to really be that to XX% comp it's within to SaaS range. operate fees

with And increased impact wouldn't heads, so margins. even expect I that to our

very a billion particular, could, strong just and thought around And stood capital In across $XX if Great. so that's just pace infrastructure I or annualized deployment. quarter, there. follow-up, deployed a billion estate. out, $X Clearly, real I

real take you over look assets level? about as within business you're the get to out can this to bit taking next your And a actions deployment you capacity couple the you've the increase to talk Just deployment taken in materially to little actions that terms of like be that would years, see actions need it X the where to and say, to And in you what higher in, or that pace X for today? years? are where be of you capacity is from order

just Craig. some Why don't should. deployment detail glad we on And probably it you expect you around Scott as tomorrow. relates investments Mike, I add And will facts it. I for about to start, asked haven't about much talked it's Honestly, as give deployment? as we I'm

we're $XX -- really or -- note, approaching continued Year-to-date, active. we're the in $XX be you to quarter, we've billion. at Year-to-date As billion.

us. that at figure were meaningfully above So in XXXX, when for where months, that's you we already was look year through record and deployment X a that

healthy. been deployments So really have

of private business XXXX. estate and XX% about and that if in couple you XXXX, of businesses as infrastructure. And thoughts between were a assets real I were And our with equally in strength and this in XXXX split we've in those back again, of again, contrast deployment thought markets. real to they Combined, noted, seen think quarter XXXX that, first, about the diversification. quarter, on amount being that that XX% you with pretty relates the

those asset So interesting end markets classes scaled, you as -- again, size of new when we've like than are infrastructure, real businesses it's as core larger those -- core and have core opportunistic. in think estate entered

So us been addressable that again, has increasing. market for

most had for deployment. year. in its that in us Core seeing You're deployment actually active the PE quarter

are and while of growing seeing businesses terms these So in deployment. that scaling, you're

we're disciplined. being one other as just interesting to equity, private relates that's think point I it

you've level drawing seen activity really, and of to high. exceptionally really numbers the lines ton the in spots. So of flow. our we're what pick But disciplined, is looking being a There's we're and is

equity of again, pace materially So despite post private amount be in deployment, markets, XXXX. growing And scale credit healthy GA. year-to-date, in the to actually that public below GA, was is deployment the on before continues to overall platform

well step-up So a in terms deployment. as both finance. origination corporate real that's That's as of driving asset-based in in

platforms. Yes. a meaningfully great No. expand we I Mike. question, opportunity to infrastructure see real It's real mean, do estate and a these

real over last significant markets interest XX client all in created both These assets. to the very there's a of of As the or those amount were know, of years. you XX that more less end and course large things are

more which asset classes the There's opportunistic do, real yield X protection, right I'd you've way, point One now. have inflation a regular significant investor and to. things probably got we're of you strategies. is appetite these If scaling just,

per one, So wasn't from The infrastructure, it we that billion to continue if the the it, to fund, how scale so has -- you think is true opportunity in as thing $X that platform. teens in scaled were an estate. ago, long about real big materially we same opportunistic platform

III, thing same REPA European real have opportunistic estate see to but strategy, can REPA You Asia. also we I in a

real opportunity. So

on of scaling back the regular keep those Just performance. way platforms

be doing in we're core. what would Second

estate. plus year this We real capital are large have core performing core scaling. markets. Those for meaningful for very and Again, and well end raised infrastructure

it's now a started and Europe going something U.S. plus global. the Third individuals. the real other we're point, scale lot There's That's products in Fourth opportunity We our of equity. real take individual there's the just not and what we doing investor. real also assets process we've going Craig's talk other expanding continue global we're then add as to in for done versions about to assets. good We're democratized we'll a to to see of to to And and so platform creating continue of we in a opportunities Europe, going strategy. expand business, real estate but to building allowed meaningfully efforts selling more credit continue various Global to is would you're have real Atlantic what we're credit. Europe that these around big that Asia, core us there. and estate the that lot, A start see Asia be world, products has to and us to including to of suite in estate a KREST where

saying So a agree with a long we of way There's you. of lot opportunity. growth

remarks. At to the I'll call turn closing the management this session. end we've back reached question-and-answer time, for of the

follow with to And Rob, joining again. thank help. you for up forward with we us. Please you directly thank Thanks with quarter. next you us speaking any everybody, look for Otherwise, follow-ups. your

will This today's conference. conclude

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