KKR & Co. (KKR) 7 Feb 232022 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to KKR’s Fourth Quarter 2022 Earnings Conference Call.

During today’s presentation, all parties will be in a listen-only mode. And following management’s prepared remarks, the conference will be opened for questions. [Operator Instructions] As a reminder, this conference call is being recorded.

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

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

we’re quarter, reporting and $X.XX fee-related distributable pleased be this start quarter. walking So with through earnings share of after-tax by the earnings $X.XX share. solid of I’ll per results per to

million fees in management billion million, XXXX. us. with comparing to XX%. management within revenue were our compared real fee over from were quarter. billion. be Management management fees bright $X.X quarter, greatest And XXXX where monitoring our the generating first Markets and management year last XXXX, $XXX business, to with to transaction QX, increased growth fees to of business was spot full and compared $XXX continues Net beginning $XXX Capital So in Assets of XX% $X.X Growth full million, QX Real fees. XXXX increased that’s X% for In fees a up XX% to up year

through to Now expenses. go

topic expenses of by compared in to The circle low $XXX Rob Our fee-related this us at as which levels increase other And was back going quarter is capital a driven professional actually for to related higher given increased the firm to end were raising. margin activity quarter here operating expenses as for range. the XX%, XX% million. fees on our well to the last across was is compensation moment. XX%

in for million an share FRE QX earnings total, So $X.XX fee-related per $XXX of or were margin with XX%.

our income. by while realized Rubber positions monetizations million the driven driven $XXX Marshall and to a the quarter. Moving as as realized fees crystallization interest Overall, operating performance well fees earnings We came carried at incentive of Realized with in Minnesota for generated performance were asset at of Plastics number was Wace. million income of million. management $XXX public by investment realized $XXX

generating insurance quarter, Now Atlantic turning earnings. Global to segment. $XXX had our strong million of operating another

new continued This invested us $XXX from quarter, driven in business were rotation assets in increase million, an assets. growth per higher-yielding results $X.XX alongside a DE This for of share. or resulted into by the after-tax

rates driven X% portfolio growth the ahead broad the as Those the X offset for some rent strong appreciated quarter estate of asset portfolio indices was real and well indices down investment Now cap quarter, ahead marked of widening XXXX. well investment year. flat the are release. the the X the quarter. on the by In a public year, real investments, REITs meaningfully our as the traditional turning major Pages shows unrealized of in in X%, figures And as public first indices. estate for the in by portfolio for by earnings for performance below year. private X XX% Page Beginning off with for quarter full fourth and of performance public was QX equity, classes to our and and across as

given And infra and again was the for the the X% the the portfolio Volatility quarter in credit and infrastructure X% across the X% side, up of markets, X% year. up And the markets. our in limited XXXX, trust indices the quarter in portfolio The performance was course, high-yield course XX% very in and QX X% volatility not minus up equity for to year. XX% for alternative broad leveraged was the portfolio the X% and for over strong and on investment year, credit up was grade year. declined of up

Now shows course that Page across you see recent marks have reflects of the taken investing QX course, figures XXXX. been since you inception here, on X important see page earnings release. are our or funds investment The two-plus perhaps of the that of more any in figures performance for the years. This over

page at returns feel we’ve taken of been clients. about very together, this the continue behalf on to good Looking generating and our we

In and Of to note here, backdrop. of perform. X% investments, our the performance terms balance again, equity was flat balance continued against on investments sheet down in have sheet the year, the for a volatile quarter private core

appreciated and portfolio For – X% and quarter respectively. X% appreciated PE the core me, year, the X%, the excuse

to Turning to billion fundraising Atlantic year raised the PE total Global alongside flows at our incremental our and driven billion. credit, This This was growth transaction across We XXXX strategies, by brings in GA. at capital traditional capital leverage $XX full metrics. $XX new quarter. a raised block

of $XXX at with Our $XXX billion AUM assets to in XX/XX fee-paying under billion. management increased coming as

disperse private $XX We billion find to Infrastructure deploying in quarter. QX opportunities the about invest with traditional and the continue for accounted equity globally. of to deployment opportunities to half

This And at go announce announced quarter alongside with historical increase XXXX to annual increased change our to to back first the earnings. And Rob, $X.XX to finally, to up pleased authorization it effect handing our stock repurchase we’re dividend will dividend per policy into the from we’ve same time, million. consistent $XXX approach, our our for intention before $X.XX share.

over that, with to And Rob. I’ll turn it

what together where as everyone, by where this recent thought a team I discussions We’ve energizing. most to right more need are we sense that never begin going you participating senior around stronger us. earlier had we’re We our joining a opportunity capture to going would for meetings. we got a Thanks our Craig. in review incredibly been annual you, a importantly, is this of of call get firm. firm, front was aligned to lot, in thank team where are I and And and giving year Listening and morning. the our planning as these we

have in a growth confidence achieve for We it. ever sustainable number ability very clear long-term avenues than to and of and more our

our minute. year, capital second our some the just our year $XX and raised I Starting of fundraising, more to to opportunities before with a for in history about But I’m active that, these growth I XXXX. do in a first going we most emphasize wanted step points through few last billion of interest material of last mind backdrop assets course, strategies. rising year real significant contributions front clients credit in our our and environments. much strategies from came more all a of for against in flagship well XX% businesses, that often inflationary complex as of our rate Over and market are as fundraising without

to amount healthy the deployment, months. Moving capital XX a of invested we last over

private to taken find XXXX at to here ways together, equity assets as to and were creative approximately very in Looking deployment real put was capital teams able work. XXXX compared XX% to greater

as private in firm Real deployment asset transactions we our of as scaled ten become activity in has such has diversified, new Over Infra, were half announced total credit and on For and the period, same more a and example, or Global in growth strategies XX% our And across deployment. take increased year. asset-based partner of over footprint number expanded with the business two almost XXXX. times funds so XX% PE, the approximately focus course totaled that XXXX, closed a two-year that has as as has deployment Atlantic finance.

to finally, low revenues. XX% articulated was comp is XX% And saw of fee-related of margins historically. our That that the end to at back I’d QX. XX% you range Fee-related we’ve in the circle to compensation the and like expense compensation that

low margin of XX% case, total comp XX%. the income quarter, realized range. in this investment realized XX% comp, a outlined end, the the to including XX%. mid While equity-based which, as the the of comp compensation reminder, at also Carried had quarter impact of was XX% our for at reducing income, This the interest which of investment was is was

felt across the the ranges to ensuring XXXX, compensation investment discipline show recruit, our world-class that Given support to still the of and we operations FRE expense incent and distribution talent. KKR have while realized income move we and could we some of interest generation investment, end in carried over importantly, our capacity and earnings, that low of course operating retain

growth is earnings levers we to long-term about key leverage really component. operating as think from generate we As here, a have firm that a

KKR stock. our of own As reminder, a approximately XX% employees

So, business. well we are the drive across aligned margin improvement to very

side, monetization to the us environment outcomes want but activity. generate gears, limited me give And surprising an we’re let is the on for the that bit of how monetization timing before slowed switch our given outlook thinking have we a partners. for when QX Things update I about nothing the and realization to on you

we revenue as approximately today, we quarter. of the have here So, monetization-related $XXX for on million visibility stand first

significant Now several we six think to KKR areas really there key years that looking turning are to for going the and growth page forward, come. are drive for

areas platform. in not The first the QX area end four times is been $XX at growth to of credit Growth compared into as end Pacific. AUM the on seen stood only ten-plus both $XXX flagship the the across have core of of years. growth full we our in such by our extension driven has at so of at XXXX, estate just across KJRM That’s Global equity meaningful suite billion. as billion where our on real further The side. assets, three our a infrastructure well continues real acquisition Asia but fund, platform propelled to by grow and as Atlantic side also products,

and a focus platform limited is from with aligns our of current quite our real obviously across momentum partners. Our significant well big area assets

meaningful of Pacific. is market-leading KKR Asia growth in to our area second position The leverage continuing for

first XXXX, infrastructure in geography, $X at in closed we Asia billion, the almost our progress Looking well. the our strategy fund largest our and on as raised credit Asia

well ahead, moment a example forms XXXX tech which growth our is as to estate KJRM, real expect our well inorganic as great of ago, acquisition our a of real I sheet use franchise. differentiated Japanese capital. position estate strategy And Looking of we to access in business, expand as balance both our strategically pursue we Asia to how Asia mentioned as can our our to enhance market is growth

this at progress Looking altogether.

to Our has that’s up $XX the times roughly at since XXXX. year, end the three billion increased AUM now of Asia-focused

toolkit fundamentals our Our macro local presence has paired against very compelling business created KKR long-term in region. the industry-leading with

for The us equity, is area third is just opportunity. which a massive private core

to well market our believe we global where be and that the asset positive culture us significant, most and the across the addressable be of business As many And an class. have so is we very impact that financials. model sets area different up is importantly, the in P&L best parts player can it the

generally As We reminder, XX PE have a stable XX create investment a cash traditional expect is businesses tend long-duration our investments the plus lower to portfolio. within and to quick generative. Core currently traits are we These These do XX profile years. cyclical less have private equity core businesses than to investments leverage hold a these be for portfolio. more and more strategy, earnings within

investment believe Today, I flow-through PE the also Yet we positively distributable which transaction we their of only fees when our management XXXX manage roughly X% The manage AUM space. impact earnings But sheet in in as core to accounted $XX XX% investments well impacts our billion as for look carried after-tax of investments. largest our interest. you of our fees, realized balance at capital, third-party accounts for income. over is these

at EBITDA portion have sheet look balance our accounted our of the further, to you This core to for portfolio, and company’s in is highlight totals point if even this way, over another million. $XXX through Looking the no this PE not to It opportunity distributable is that asset have is class in where really compound percent we design differentiated an a our our because earnings. this we know investments Make allocation XX-plus capabilities. we mistake, by substantial purposeful.

raise XX% capital to of traditional we sourced We a net billion time, private billion democratized capital this our clients Approximately mostly of compared that path, to historically fourth of from XXXX. XX% and raised big us we drawdown we the expect as access will capital driver is manage high wealth. to focused $XX from products. currently And private The the $XX has continue all XX% here cohort, been this in along wealth will investor worth expand footprint space. firm. in capital new Over in vehicle account for for

have Our the ambitions opportunities views we and for of long-term see not KKR changed.

Next, point on fifth our my space. is focus the continued insurance

billion. $XX the of AUM back announcement the billion. Atlantic was Going July acquisition, their it’s close at Today, to $XXX Global XXXX to

Xx years. So it’s the X.X in grown about last

earnings multifold. to against a combined combination with capital believe that and life key strategic Our growth capabilities while KKR’s This for lead the compelling ways strong with value has to and looking thesis could annuity policyholders. of delivering We out in remains multiple was a played franchise also fundamentals, and really and AUM, priority leading operating for us. in ahead origination GA buying book market expand

billion to is are but of grow the products insurance the we acquisition to billion business GE continued to as GA itself tailored up has That’s unique billion. have helped also third-party the $XX base. $XXX Not perpetual, only announcement investor our client the that at Capital AUM $XX from time of this us create

really same there’s growth thing not doesn’t had clear wish for and corporate sixth way quarter high-impact our competitive long-term has that that in said well. continued right balance know our enable the I capital driver accelerate a a for as they sheet. availability us is But its a And last dilutive the balance finally, less more to growth public that sheet in is The shareholders. advantage ability now. I

investments And well. tool continue time. years private accounted sheet all This our to and several past our to be core over the for roughly equity, XX% years. buybacks over in buildup have coming this trend insurance of that five the is point, M&A, have highlight balance the as space per another earnings share To in net over deployment to drive that just share expect able our we we

to continue in ability our I team drivers management particularly real about and build are success, conviction impactful the our that went to on for entirety we outlook. positive feel our we future through extremely six summarize, The long-term our of existing across To our momentum. just have

hand With to it let off Scott. that, me

our markets today, and look everyone, call catalysts business. short-term and Rob, things the joining would I share industry economy for seat. from dynamic. remain that on no thought our I Thank remaining the also and Joe’s macro, There is results, the you, and my outlook for no many doubt thank you, There’s how today. doubt focused quarterly and near-term

a that In that out noise. of is We summary, noise just noise there’s there. find lot

portfolio. find deployment It’s usual interesting and as continue capital, We raise to business our at opportunities selectively monetize KKR.

long-term distraction. and investment seats, from years So questions, become the are noise of the now decades get takes to is started KKR creates And effort of it’s businesses that while right. scaling will our it Building ago. starting Many the years some XX a important many not planning a we to of let were come. businesses for over now we are be scaling to

will We are KKR rapid a those clients don’t, culture, than right: need right, operations. and we our will singularly it get growth focused we could performance, on slower get If talent, what to double at pace. things If be we again be. we

Growth is execution. the result of

at and that look executing progress, back are recent we team, news the management strategy we can a five good feel control like well and The our fronts. is we results is executed as on So emerging. on being are as focused what those we

of billion two couple AUM doubled And more fees years, TDE doubled two things share well. evidence. In our to fee-paying from $XXX have over our management years, same and billion has our almost last to a than the as we has and just AUM as Named $XXX doubled. per look the

of come results to execution are through. the So starting

to strong for be encouraging us to to we more even of evidence growth years have continuing What’s looking. backward are attractive metrics these But is come. the very

Some these of and be some less may for so. this calls apparent

a looking name the we of at. just are that To few things

create to new over years. several First, last the we’ve businesses continued

that of in AUM ago. our exist And did capital scaled we over yet is last definition. five even in our not XX% the year fact, In over was not strategies years raised XX% of

half way, a the assets recent another have of of approaching are had Said innovation manage the still now lot we and of growth part the we curve. inflection

we this attractive. powder over dry positioning find grown last invest to billion well our $XXX to billion environment, years, Second, into $XX has which from the to two us continue

Third, products just our efforts starting. in democratized are

launched an of engine of be for will structuring work. to and upside across two have after growth us vehicles expect additional year our team multiple is the expect classes. firm asset this for building years all we We and This

announced strength, of with goes assets years significant to Global ahead since from well Fourth, X.X ahead. and schedule we Atlantic strength the doubled almost ago, transaction has opportunity

The years back. and has their to maybe at our salesperson two next people of couple even create products new XXX year a insurance, more less Fifth, private and XXX for takes stride. this family two will our investment visible, typically sales in hit from a our of grown wind It the to show offices learn over last and up or result the team across and institutions, people years wealth.

Sixth, made understand came cash carry that it invested fraction eligible dollars carry-bearing we It’s ground we the increased carry ago was generated in have AUM is dramatically. investments when a capital largely our years as the five-plus our what important well. invested and from today year last to was our of

majority investments carry To Today, the was our made billion, harvesting times. vast from be up last earning X when capital $XXX year’s invested of came $XX billion. about it’s specific, roughly carry

So the from near-term environment your matters. don’t let divert monetization what attention

is slide the much strong And or invested this on never team finally, scale been capital has as matures perhaps larger our most Craig and with showed more forward important, The the returns cohesive. you. of stronger incredibly

all and several regardless KKR years last at growth This is In we’ve for this, continues in as KKR such gives what earnings increase. the to of summary, made And over years, near-term opportunity us noise ahead. the done true and investments see of our the and markets next the power of the of leg outlook. we’ve is confidence

confidence our and strong is are signals The noise. the by high. distracted get don’t So

questions. With to take that, your we’re happy

Our proceed Bank America. Craig with Thank we’ll session. question first question-and-answer Siegenthaler conducting your you. of comes this a Please be question. from Instructions] time, [Operator At with

all Hope well. everyone. morning, you’re Good doing

Craig, morning. Hey good

Hey Craig.

is credit So get this given of that my year. recession Global to I question prospects we stage and an in in of inside business, this the how quality early half entering metrics on wanted first especially update Atlantic. a be trended have the hear U.S. may

The the NAIC this talked it’s Craig, calls, of or X Hey to as GA exposures. prior in for nature. short Thanks well really is question. investment-grade very its it GA’s relates but book trend is about XX% Rob. lot credit NAIC We’ve a so answer to that X, rated in continues

of X% GA The sub assets. equity book at is total

bottoms up we’ve done so strength portfolio how the feel holding a And the and up. good sheet with the really of into we’ve year-end across gone as entire balance is

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

Hey guys, business. margins hoping good morning. scale maybe was I a about could and we little talk the in bit

probably is guys alluded FRE able this year, this for partially activity But I Rob, your in of were So pretty monetization you. bring this you prepared year as because down to think, remarks. you comp good

sustainable about think So double picture, of if for other of just, should rate a I variety could comp of back higher? click factors, into the lower monetization business parts can again, was And weakens kind in we drifting sort a more basis? activity is Or maybe bigger that of we on in scale at I run the rate flows income there cyclical enough through hoping in FRE guess, the how XXXX margins be where business. monetization

we think sort people. about and your sort of not report pay of you silos, it in but that’s guys ultimately how You

color. little around, that Thanks. of a all hoping wrapping more get So we’re

A in Yes. Got it. lot there. Alex. Thanks,

So one at try time. me let a and tackle

of start that a of years that a FRE of probably now And believe FRE sustainably allows XX% now, business. we’re of margins. the our low we’ve We’ve for making for a number spite market into a model number business just drive reasonable me quarters margins conditions. back in been investments that created margins. consistent We got a assuming with First, let we’ve that business best-in-class some can that

we’re over that pay as business investments a as time, of margins. model believe off mid-XX% can fees the on But well we we the back making those as the come create as FRE and investments that delivers that efficiencies, in those

going to in forms. that’s think I couple come a

I operating that from come leverage. will think expense

QX from compensation of the think to would’ve as this I expense has also you potential year. come leverage seen it in

we I’d as margin taking it a about to compensation Now of quarter, thought the back how couple things that. say relates inside to

this such across prepared of and want board The the sure world-class retain, we’ve first, remarks, business recruit, in our got make the we that said at that the compensation I on can KKR. and right talent amount we incent

the And end we that compensation XXXX, at pool available that QX, we as looked of bottom that range. made in had operate can in the we the we determination at of

monetization range. can total might I question on comp you it our comp activity margin. Now next at low-XX% total operate look would is out? we’ve where asked across year guided And the margin, instead what comes that down in shake the of we historically a

XX% interest number. In We believe, XXXX. margin XXXX, guidance we that’s carried XXXX down monetization and XX%. if were at highest below XXXX, XX.X%, our down, I comes comp comes at And and were that

equal, And margin compensation you so would across things down. expect all the come to board

topic. So hopefully your of offline the I at was question, up happy lot there got on catch to it but most a and more in

the add Alex, compensation come thing that they going come result. understand is Yes, monetizations, to people down is I a as only our down, would if

Our business, get cash outcomes. paid on you

I that surprise don’t to anybody. So a be would think

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

Hi. very Thanks much.

that laid you in believer big growth picture big picture a out. the I’m So

cool that. So with

talked I to is I focus on your the think five the XXXX a getting awesome. XX%. PE about you of performance, second, things One long-term right and perspective, right for is get down want performance

X%, only the just on down Thanks. talk I X%. quarter. my credit relative leveraged heel could right the a to real wonder want that the composition I was eye portfolio you down perspective if do is your quarter in Publix about the or caught it’s how track that Achilles to I – great. record tail. marks fourth only long-term I longer I estate – was know think know we

important could question. valuation that’s Glenn, entity We’ve to start and I performance. for Glenn, been reporting closed-end for if for this was Craig KPE, the Rob. include KKR it’s discussion? with Yes. don’t just Then Thanks close relates predecessor fund spend really Hey, to years Scott that as methodology you because some public XX it into. which Why as think merged the now I a time

And do really our which determining that don’t Level we process have best-in-class value developed time, that those over fair assets period we’ve that X of marks. assets, believe for for observable are

methodology by of and different class, a course, process after but you’ve by is methodology we important is asset and have on critical And is we is, which seen its and quarter process delivering fair we quarter. think nature, representative that quarter what to in over view believe in most time consistent us aspect exact Our after that XXXX. a fair and value,

thing the on the our process, perform got think I those we’ve valuation valuation exercise provide excuse expert valuation and as investments. assurance who agent, me, is a of either other space in respective that’s their on third-party they or mentioning methodology, an worth part positive consistent

like as So we might well if rates by course market portfolio our our as movements feel the you and operating that is premiums that performance inputs impact at impacted history, DCFs equity look year over by certainly we’ve balance and well. the that of by as risk gotten interest right offset

important so in that I think consistent really we’re representative and quarter-over-quarter. portfolio. doesn’t it’s we feel mark our our good across that delivering respect, And methodology to the right And really it’s understand that change

consistency really points to as and two hit don’t did I relates the mentioned with Rob’s statistics – work real already it’s there. just there Glenn, up evaluation you the are it do of one around pick we that have why estate. Craig. agent. I on first then just the on And process us for the on And opportunistic

quarter. and discount with assumptions and for of real estate, rate In that up look come recent will the specifically agent case rate they’ll value specific cap that transactions at

activity muted. but rates Volumes widened. really So the like transaction off U.S. in transactions in XX%, a something observable were quarter cap our like those was QX, in

so that’s you in drove saw the quarter. the performance estate figure real for really what And that

is the important honestly, we Now, portfolio itself. the second in think more which is fundamentals the point,

those As as fundamentals. great the to our well – portfolio we feel as about continue

housing, towards and to assets growth. be strong weighted total, those and of So strong where our seeing fundamentals over housing, continue rental and fundamentals flow data storage, are themes and exposures in cash seeing Industrial portfolio XX% centers, those student you’re the assets, strong there. growth we’re

office On side, only globally X% the retail, below we X%. to exposure our exposure U.S. is and flip have

assumptions And then quarter to rate give portfolio actually put sense, in QX, a the help see. marked you just cap to used two and you instead would’ve if constant quarter the rate the down seen that up those had of did percentage that together, you in things we discount for

So Page X. NOI from that again reason we really in are put strong really underlying is that growth, dynamic the we and benefiting

real across And think clients think how estate, evaluate behalf on performing figures day great they’re I XX So think much any of and as case we’ve of been and that I our bars, this inception, since us we at, the our less look strategies, when about period, clients. real looking as appreciate cetera. at we you on question, focused blue in performance in performance, your beginning assets inception the the you et I of our and the noted feel

it’s Hey Scott. Glenn,

no. anything to from worry be my standpoint about punchline Just if were is trying out you, is there the And here? figure I to – I’d

I not said, at It’s matters but consistent surprise to the to all a of markets really very marks. marks been continues performance that have operating think the they guy come be is which some as methodology. we’ve have us the they’re see given fundamental What had off, strong. portfolio, multiples been just the down, off,

bit asset of in our that might real investing candidly, better have and stronger the credit what’s going feel profitability the themes right performance it the the terms behind fundamental years, revenue strong, right book we even got given on we economy anything, our and operating remains of book backdrop. metrics last several If than and remain expected I with The strong.

as not as about we’re not is expectation it. either. marks rebound worried overall markets about rebound, you’ll it would see the So, worried suggest you’re I My well.

Our Brian Please with next proceed from question comes question. your McKenna JMP with Securities.

Good morning, Thanks. everyone.

as a and several going adjacent earlier will today three think we of curious areas stages? strategies and of the you over platforms new this job past of into next from years, these be great stages persist expanding the though, or products into have more to of a to years. the mature expect should we cycle more expansion done number moving the five strategies the scale to you’ve more and So focus deeper about in I’m life

for question. thanks the Brian,

FRE focused think as up. more we around that We it’s than going And more share, $X that that enough and innovation. we’re room today of products we’ve doesn’t have lot focus on very scaling continue have think we the measure to That adding per TD doing. substantial rely than outlined, of what $X I a on to be new per growth. said, much greater XXXX there’s profitability is of our taking share,

are something in yet to because that much there’s But do. and top us go that new starting our we what where player we that products that believe growth opportunity on markets at scale from think aren’t that going execute take where to get be can products world time be front in the we them likely I and today of addressable of list XX% we large scale what add small scratch. is we larger We have to than to believe is going over a be the of if we

Brown Mike from Please is question. with question next KBW. proceed Our with your

taking my for Thanks Great. question.

certainly the the from business? six XX insurance, maybe Thanks. that given thoughts new So could It’s net be a clearly you’ve quarter and I net And seeing, trends of to rate that there. favorable months the you business GA. that start been the investment If next about wanted we on strong the think then cost income backdrop and touch on with how helpful. good would should to any

Thanks which Great. a of performance. a outstanding on right in had of We’ve XX% go-forward in to has XXXX Clearly, ownership had of over And basis. GA to for that Atlantic Yes. the still the level type our question. out again two lot that really years XXXX. achieved course we believe that’s XX% and do the I targeted Global the ROEs. model

we matched. pretty we’ve also took side are where some rate our on benefiting rates have size are book. on investment benefiting given net a that upfront on interest securities. of greater have the benefited certainly which the losses business, while – into decent now deployment asset investment are as higher-yielding right and do We’ve from portfolio, rotated floating well we put We we’re We liability

benefited gone as as interest has well. have GA And from up, so that rates

same insurance of the overall, has, cost we expense of job And operating which the the though, But you’re up a really on At done team through. I gone course, seeing think good the our annuities has gone flow operating of that side the time, at up. has price leverage business. price

be to continue we encouraged. really So,

XX% they’re to to think be still forward, business going and outperform. going XX% right hopefully, range able that to I model the to continue to

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

morning Good [ph] folks. Obviously, topical raising thanks. fund Great, a remains item.

their and LPs XXXX could LP around on extent little over to just this as hoping we into you the a of allocations past bit the And how you comment several be and of have So able whole conversations of sort look you. dynamic evolving beyond. to might Thank with sort been “budget” address also months. sort

it’s question because answer you’re fashion Gerry, in that Chris kind that I’ll It’s it who hard are [ph] where on take talking Thanks, one. to. to of you Scott. depends and

the the we LPs fund doubt, of half got last some of pension was were into So of reduced that struggling kind dynamic. denominator, year, no U.S. with allocations of predominantly a as there’s back our back on a

to has capital As work. we’re conversations and indicate they’re a new turned, the softened having has of budget year, some looking put and calendar there’s that that to

those outside you East, in particular, Asia, the struggling if Middle issues. U.S., find But with insurance, you go aren’t wealth, same investors sovereign

several are forward invest to figure and how leaning fact, them very to environment. of into trying out this In

last, is we’re is What protection just consistent in year, this consistent, are. finding though couple of with lot you depending overall where interest the very is, on like not inflation picture a Anything So themes. a and of

yield.

an all times quite real I private of estate, perform interest. increased I’d in tend this, So, to well. credit, awareness infrastructure, amount significant that think things, say like equity

years vintage this strong So of of time. it some out period coming be very should

this swinging So environment. people to advantage of bit of are think take to about kind a how

toward So, in way. then overall this than And I the conversations in invest foot gearing this more I’d part there’s front a year. their of more say are is deploying And look leading thoughtful stages And shift maybe into how people of do that year people last they environment terms the COVID, of in which post what’s that’s initial some a this more of and bit back and aggressive of of post-GFC the little in I maybe into spend. some maybe think were to sentiment.

next your Suisse. Katz question. proceed Credit with with Our Bill question is from Please

of appreciate drivers. your you back to taking much. question. thank circling everyone the Okay very growth one and Maybe morning Good

If a the little about you bit wealth global opportunity. on private talk could

And macro hearing products yields what just a demand Thank you. liquid the business? couple behavior be coming update having in and you scale you’re out. the You more us terms mentioned given with products. mixed Maybe from of of the some new what as might in of respective channels, on backdrop higher

by think Bill, all start? broad going is near-term the be it’s Why a any Look, we’d look But positioned encourage to I we in what our Craig. ability And tone we’re our everybody enjoy distribution don’t we at in I opportunity us. that to we see I with think miss influenced period relationships for markets. how to partners. what with the record, our really is innovate huge track when not brand,

currently. on remarks, the of we of some really in positioning handful our things a of last spent the be new mentioned part to ourselves and think products, able as that I of Scott a years better the cusp the to two firm we’re prepared launch

people a as addressable that think great. again, final just KREST, like here thought positioned been that with we in the I changed. market. I we an opportunity and had has And experience the the is And well what of views product think guess massive again, So, enormous feel I have performance KREST in an really our entry of one hasn’t think,

an So an X% current return over inception – performance X% XX% yield. a was date, over in to XXXX, X%

when good they’ve the at experience investors look initial feel that the have we had democratize think we what about experienced. I very from products, So,

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

have I another to of morning. the follow-up cap rates idea could there good where where those of type comps in that, us Thanks, And transaction or moved follow-up specific before? Is the you give portfolio to any drove on region and market. were as a assets where mark? the cups an specific real they were the – estate

disclosed haven’t specific rates. cap we Patrick, the

is, the is, one, this I think wouldn’t be we going in surprised period. I XX-day I what to variability our we is be again, data a see it’s is in rate dynamic that be the have think And each going differently. again, assumptions real the probably based see manager you’re – wouldn’t – quarter going this portfolio. And cap those like the if view U.S. to given points of book just you’d to actually predominantly maturation

And to big biggest those are the of just be to movements the to given the really those is portfolio, going the those that I’d instances almost the again, industrial mentioned, allocation as where But in XX% exposure strong that in court. overall have those definition, in and themes – from significance those in piece, to going we’re by are are an XX% growth. largest themes our continuing [Ph] see the contributors

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

Great. folks. Thanks. Good morning,

just products year? the actual back then, of the the that? of part to think right should be products near-term AUM headwind space definitely you launch you the retail go a FRE for you business come the products pay margins, to long-term and that of democratized infrastructure thinking build. if scale scale that build up you overall to of in improve remind you as – democratized FRE then, to you this we to democratized the the could wanted and on it’s the Realize how rollout a part going long those as Maybe as strategy. the have over a And could shelf margin, plan term. to Just And might many the now us back where retail it’s

on Hi, start? margin Craig. up pick Why then, let we’ll impact. don’t It’s Brian. And Rob I FRE the

billion of these democratized in roughly that we’ve billion of for vehicles Just framing terms about got XXX X again, AUM, significance today. in us, are

So over AUM. it’s our a of X% little

given of the suffice first we specifics. the year, launch made, In come filings make we additional the terms get we as to products more we and But rules of from progress. are we’ve and the to continue half you SEC can’t there’s here, lot say where we’ll keep a of into abreast think that and of in to

some that in the about, into those are where you we’ve and marketing well in reference firm talked we’ve that as distribution Brian, as costs been of costs back investing technology.

our efforts the vehicles. democratized supports of in Some technology that

thinking time, model access business about to we our operating gravitating to and that about as incorporates low we’re space. the the get democratized the how mid-XXs, vehicle So over talk in XXs

And expect XX% sold through to we’ve said the over I’d been platforms individual trend XX%. capital democratized add that said we’ve of so investors, to we kind that’s to of if traditional individuals, thing only ex-GA. think roughly selling plus we’ve over the that been XX% time, what been raising at Brian, more And we’ve is, XX% to fund formats to look the to you time

it we we’re to of shared as term your think and major And near we’ve across over base. kind that expect of goes to So of larger do we the what case. time product our over have percentage time, all question democratized doing also in still this of think that’s the versions areas a where an of increasing of

Our next with Security. question Wells with proceed Please question. is O’Shea from Fargo Finian your

portfolio the your should ROE be predict? everyone. A on in morning. long Hi, considered, understanding environment into insurance elevated color Good we portfolio higher to driving with to with on hard the expect today’s rotation the that follow the yields appreciate remaining ROE, can inputs impact, normalized today’s how

can while Yes, elements range as do some things were good one there’s be there that we portfolio XX% XX% rotation. elevate look that Fin, I some continues to that year. to in think well XXXX Listen, for number next that thanks a question. forward, for timing on And the as

for good that’s range think the the I still So term. near

is in GA for XXXX But done our returns that modeling generate They’ve are right XXXX. As team able I that the hope and suggests to in of range that. the that’s said, we that XXXX. excess internal

question next Michael Our is with with Stanley. from your proceed Please Morgan Cyprys question.

Thanks good taking the morning. for Hey, question.

of quantum a that large backdrop. the a in as XXXX. like capital, tougher Seems how deployed on XXXX, characterize you similar XX billion Just level deployment, curious of was just but would capital

for So or maybe a curious just what’s in scope your deployment relative meaningfully say step higher that you’d level, how at full grow XXXX And XXXX. potential? that function to characterize to the

the Thank you. a have help housekeeping about that capacity just realizations now? And to balance could quick and question the off the deploy you quantify and five thinking you’re sheet Rob, then like what quarter? just look how years if you from in investments for the Just might

Mike. Hey, start I Why Craig. It’s don’t deployment. on

particularly a activities, very look, we our look things in have precious. couple pretty think you that as of powder a dry things. a us firm. primary shut. at you the XXX are Those is at I look good are one, When billion plus when Capital of markets for

activities when to So capital put look we I think XXXX, we very back at in good we work. our that think about I feel

We’re We value focused. love carve-outs.

really dislocated. think the environment that of public I against things about pretty we Rob markets the of just an where to is One in amount talked did are interesting public privates

XX pretty infrastructure, the Eight on for those statistic. take done private equity, estate. is think a or to real have I us of So interesting in announced closed of U.S. privates outside were

balance of activity. balance feel really good on think I So we that about

if look always reflect at kind deployment, of we go through some back. just, other thoughts statistics of things, it’s to as couple interesting that you A

I think you’re one, real seeing diversification.

was deployment $XX So billion. XXXX, in $XX infrastructure us traditional billion, billion, estate real for private $XX equity was was

how it’s I geography. has back really meaningfully by grown and strategy – a reflection diversified when at this by the look you So and think firm of

you’ve Kind the point brings which is growth of second of us to the seen. some

gave in assets, earlier in growth has infra was little but Rob businesses, that year our split the a year, grown, averaged is on grow of example and real footprint So be equally AUM over real an you’ve seen XXXX these between real meaningfully. and deployment statistics XXXX $X estate as infra through $XX Last assets a billion. deployment in billion estate. real some

pretty us. to $X billion, those between split businesses equally two from again billion $XX again, we’ve So gone for

when there’s deployed as as And I we deployment think think for but not in. the good about look I us, we at private understood, – a you when third – is point, I think leaned where equity interesting again, look this we and feel well at it’s we

statistics give you of me a couple there. Let

leaned we So I think during think in I everyone XXXX in. COVID, remember,

deployment in XXXX. higher XX% was versus So our XXXX around

more think peers. I our we are than active

up XXXX, the was I felt catch-up felt think materially. In like that. industry industry need and the people deployment play almost it remember to

in U.S., activity was investment XXXX in than the double XXXX. So PE more

I ways, fear. and think remember people that’s in some what many

For us, deployment flat. was

noted, equity the So challenge with deployment us then into was and really debt didn’t any again, you And see and over kind volatility was that XXXX, markets in you of environment. for again deployment for as acceleration lot throughout an down of private a the up year XX%. a XX%, industry

look So deploy time and again, I think we how advantage dislocation. over you’ve seen this take of to really of thoughtful dynamic

the same that point just Again, final then to scaling And relates credit. thought.

$XX So in us credit last and XXXX, total was deployment year $XX was deployment for $XX.X billion. deployment that billion, was billion. XXXX,

that grown, in come deployment. you’ve as has seen as online, meaningful has increase a credit business So the GA

activities answer, year. So hopefully long-winded gives of the flavor again, for you last but little bit saw that a

I our at billion of GA of up versus particular. color private if bit Yes. that the shift. estate The it apart was deployment But work the look Mike, XXXX down of add the look that, numbers think activity front to of equity, at deployment right, real a in you relatively Part part a is is XX%. was in private year-over-year. low had overall and actually transaction to the was on do flat you’re is we there’s in a market, you infrastructure if lot in you in take XXXX, markets, Credit I’d $XX if makeup, XXXX. But the actually only

point leaning to in more cautious maybe last happening we Craig’s after being of a year into a in late valuation with was the kind what in little markets XXXX were high environment. bit So

sheet. Then off realization quarter the our million about $XXX deployments Mike, were real balance quickly for the

question is proceed with with next your Our question. from BNP. Please Arnaud Giblat

conditions if Are bit quickly Good equally, that’s on I about on of area been talk Could about deploying the infra. active opportunities narrow talking that a very How seeing outlook participants last in on more a improve an And as financing are you morning. obviously mean more a I the Is you question. you If private starting the up deployments? bit seeing equity? improving? industry the the for market. bit to that of comment there? issue? are spread follow could of the bidder Is in a about the could a you just lot pipeline

Yes. the Thanks for question.

haven’t would the I business capital. real think continued of put operational and capital structure. a really to think can deploy needle. we’ve where we to gives to helping include in bring find a think on deployment, us debt cap healed, up the actually do despite side resources to our areas I leg interested but move now debt markets bear looked Where at we that, the the those ways fully markets I we’re together

been very active to We’ve privates. we Again, carve-outs. public love

strategy, on I us. single I in hit infrastructure. success story think that’s And probably a actually think be busiest area by the firm, our infrastructure to you real continued story has and just growth for a real and

I it’s of we course bunch when where XXXX at of back Investor – statistics we think the there April actually be thought would Day, a look our we over XXXX. of gave Infra

organic. Infra-AUM year-end of billion. Just to was we’re $XX and estimate exceed as Investor a you at point billion at We at that $XX $XX that that $XX that billion Day Infra-AUM estimated would all against sense, billion give

XXXX. of double $XXX we’ve range. will $XXX infra that fees million for year, $X fees for basis become $XXX And about infra weighted million, so a full it’s from end came as average fee at our to look in management nicely estimate fee-paying for ahead We points. to of invested XXX $XXX management that of million And was effectively for of got billion capital million that the top to rate the at

will towards So management of end, we visibility but not lots future growth. only fee the high we’ve build got

as we continued opportunity hasn’t for for growth innovation look that And us, I and at think opportunities stopped.

So think to can an the marketplace. increase. it’s we space an again think asset is renewable lend And can class itself presence democratized we our nicely that again, area the where

So but I it’s real asking bright spot a you’re for us. appreciate about, been

across year about think and been add, the I’d And public to pipelines year a Yes. valuations our The take is asset your I have this it to private color for question, only to market start classes. strong does that align. Arnaud,

We’re the up getting close that pipeline. to and lapping see to starting show we’re in that,

Our with is BMO. question. Rufus next your question Please with from Hone proceed

Thanks very morning. much. Great. Good

Global that curious color or around for on coming just would bringing third-party follow-up growth be raising Atlantic. to the would thoughts the to pipeline question further? Just was a and inorganic helpful. on for get consider investors you. I Any in Thank M&A And the on organic you outlook your accelerate even quarters. GA growth

the Yes. question, Rufus. Thanks for

activity, of Atlantic You’ve the certainly a since institutional hit probably as business of as since our Jay’s been around actually. on our And Global is frankly of big at spot side and ownership it’s a pipeline our lot founding.

both lot the the resources And of going but that’s global. business. side institutional into a the in also of And U.S., so that’s

a help in those leverage I Asia real grow opportunity of the think to and there’s Atlantic in world. franchise to KKR’s Global Europe parts

you alongside talk have activity. participates do capital, We our close there. reinsurance of of car side capital [ph] pool today, lot Today third-party as help effort we able that in It’s So go-forward about to called would the some support block certainly IV be have a and IV I to Global to a its big part strategy Atlantic continue add capacity strategy, to of to growth our future. look the and do

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

wondering I wait converting have taking XX Rob Or these guess, ask referenced pretax where growth position of on EBITDA of the but X% to for or think a I mean, how EBITDA And I do into million guess and can the I’m for recaps start strategy throwing XX% steady starts correctly, philosophy the the dividend shareholders? when core KKR be private converting DE. are the heard in how off I do there we years investments it’s into thanks Are about the, and of is your DE the I to – and is only EBITDA are wanted and about your cash they the the that earnings, dividends? XX when outlook I think ready DE. flows question. Or be mature to I keep is And equity what down or morning business. him $XXX Good which Or have for until going? line? to what monetized? to these reinvested companies if

Chris. question, Really the appreciate

creation. that we our building what Let all that underlying there first not highlight to showing of generating we’re And yet the think in a a you’re distributable you want portfolio significant that me is in fact of to we it’s core is right, earnings. shareholders amount up Really, value do start. our and fantastic is

for a very that reason the time. we investments report you as – amend These that know, which of metric. is for DE, very is period nature a by because of Part long cash their

some So it we would revenue and them we dividends shows the or are that, pay to for businesses designed to these of actually needed But line. because our book quality up share, marked would need DE. not per or in recurring a have understate I And right, need would to in recurring you’re but underlying bottom dividend think up do in show value of recap earnings DE. even kind to the sell

about. that we’ve what sharing this little And a so got of we that great that doing now just bit you of feel portfolio disconnect with that part we’re is we’re building

As the not the we others of it up think today. largest financial some and but in show statements will shareholder, parts

term. the start of businesses in pay will Some these near dividends to

as share that we you So go with along. we’ll

been we the more do ways clear things today which that created doesn’t lot long-term X in benefits not part things in the we’re that of you to to yet. just investment know, the strategic shows value that. But Global it compounding being of And core a is of our earnings the a over is consolidate terms portfolio underlying. the and we GA’s doing what has even discussing are it and make but up It’s GA dissimilar at strategy we’ve can least just with the in some earnings, example, our of how as one of core share other of to that that that’s Atlantic, time,

a part And bad then it’s actually you do So over is of know so that, a a can we’ll with to discuss you our time, what not we remedy but seeing. want create how and good what dialogue we we’re problem, shareholders problem.

question-and-answer Craig the the closing session. I’d have back end of We to turn the Larson call comments. like reached for to

Rob, Thanks quarters everybody. in for KKR, all morning, your continued your our on you and interest the help progress to again, this thanks ahead. we for further in thank updates look you and giving forward

Thank you.

conference. today’s concludes This

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