KKR & Co. (KKR) 31 Jul 242024 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to KKR's Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I will now hand the call over to Craig Larson, Partner and Head of Investor Relations for KKR. Craig, please go ahead.

operator. you, Thank everyone. Good morning, our second call. to XXXX quarter Welcome earnings joined Lewin, Nuttall, our This Co-Chief morning, Financial Rob I'm usual, Scott as Chief by Officer; Officer. Executive our and

basis. non-GAAP everyone We as to figures a kkr.com. our the in which report are that Investor measures release, GAAP on segment press reminder, an available we'll reconciled would we to the remind adjusted numbers And refer is like our Center which call, at share to on on section

will statements, refer future our as forward-looking call events or cautionary earnings well guarantee This do not statements. for contain which as about filings performance. to our these factors Please SEC release

beginning first, quarter. our second the So results with for

reported we pleased above reporting We to approximately in per X $X.XX reported year fee-related history be to per up is and $X.XX ago. XX% income the of of compared net XX% X And highest share adjusted figures are earnings our year we share, the ago.

more in alongside a driven deployment. into of activities by fundraising detail, year-over-year, Going our management the XX% were little the $XXX pickup This up fees a breadth is million. quarter in

and fee, Markets their The includes equity portfolio both Capital incentive were million. the ago. the new first was revenue annual figure This their quarter a in at companies million, revenues and $XX equity K-Series vehicle. backdrops. our overall debt were performance offshore vehicles quarter performance Fee-related fees earned the mainly the well in activity in within strong $XXX launches private fee-related our infrastructure year given as as and from in infrastructure quarter an transaction existing improvement markets capital about

that on in line realized our performance equity is earnings. to vehicle item clear, fee-related private While our below our allocation income be performance is reflected

a Fee-related compensation midpoint expenses at came which the in at our is $XXX as of million. was Other range, XX.X%. reminder, operating guided right

And Strategic towards to $XXX in net quarter at earnings $XX were $XXX Holdings in $XXX-plus QX. million FRE XX%. we expected million million FRE operating our the XXXX. total, track were continue in million our Insurance operating of was earnings in So by and second margin came dividends as

to across growth KKR's businesses revenues basis, growth and and first on we're the quarter, a Importantly, were underlying $XXX share consistent lag X-quarter respectively. EBITDA so of the like-for-like of $X.X million revenue LTM and continuing XX% businesses. approximately as was XX% so, or billion EBITDA year-over-year, in these with see

altogether, So share. earnings $X.XX total operating were per

Strategic earnings operating together operating total fee-related equals and Insurance earnings. with reminder, a As Holdings earnings our

adjusted income. This quarter, total pretax net operating of earnings XX% represents over

our more were So earnings differently, streams. over by quarter of pretax driven this our XX% said recurring revenue

$XXX was by to private activity across realized business. earnings. well equity the multiple as This Turning secondary to investment a and maturity asset driven income income classes, diversity investing of Realized and our strategic was million. across infrastructure and geographies million of as performance pointing including sale $XXX number was the

in aggregate, was $XXX or So a figure ago. share per mentioned million I the $X.XX adjusted moment income net

XXXX. increased interest XX XX% was in QX the leveraged up unrealized past was alternative months, the here performance investment carried from in the this perform to traditional and X% that for up equity billion, XX% LTM. XX credit well, Opportunistic given LTM. up was and in X% the X%, to our $X.X last Moving gross XX% X% composite balance on up the QX. Page And the X% release. X% of is performance, QX was our strategies. And Infrastructure performance private quarter quarter XX estate portfolio both over and And up in and earnings to months. credit, in continues real appreciated in the The in up composite credit of over and investment XX% up

that exciting wanted entered the firm's milestone to turning in of strong And to the endorsement culture. XXX before June. and creativity, And forward. to propel we focus and We performance, on S&P their today us will with we people a over we this where an Rob, And as to the want reflection to believe for KKR are to and thank I'll and got is at moment continue our KKR recognize finally, and call hand over us everyone our reflect innovation going that, Rob. for index a

Craig. a Thanks lot,

We on recent S&P also a you to are expect is website. call many found our first inclusion, on time. presentation the replay Given for Investor April the there at take we that look our Welcome. that the would listening Day and XXX encourage

as guidance feel we introduced ever XXXX in good in our that figures We as April.

$XXX those over $X of through of share capital XXXX, terms net which share, FRE, of by $X-plus share XXXX; include: per our operating is metrics and per $X financial and after course As a XXXX in total earnings, per new of the adjusted raised reminder, and $X.XX-plus billion-plus of tax. between income of

a levels very figures our implies or rate, momentum across these annual LTM Overall, strong. the of the activity guidance across and firm this X morning, reported we So plus that the financial metrics. XXXX our XX% all growth minus, looking key at feel

our We XX% scale in-market meaningfully with are see our before management year-over-year funds turned flagship this is have fee on. continuing growth. to And

evidenced signs realized real income. backdrop We QX fees are monetization also investment our the performance as seeing by of and continued improving

on well the I as mentioned again this environment pipelines comments healthy diversified the our back portfolio. very as improved quarter. of quarter, echo we will I Last same those and that had performing

on Capital our we completed portfolio have as already Markets IPO Lineage So shares advised OneStream in company Kokusai, far of a in client, a public, and our took sale their secondary QX, well. Logistics, third-party

current Markets revenue of highest QX. in the in levels, years business of quarter our As a past second Capital its couple activity saw result the

in the or Capital in shaping market our of QX history. one Looking the pipeline deal fees something be unless changes pushed, to up forward, gets our are Markets highest

take there the We've of by X business to segment ability a quarters, to on billion this earnings Turning durability XXXX. of orientation but so of basis over in X-year Strategic to lot Holdings. I confident these $X giving guidance, speak to cash a remain corporates only our back, stand-alone we reported flows. think growth operating don't for in are I really and this Stepping both does confidence our think the

including to turning and of of spend positive extra really less so There Now wanted a a In number in XX-month reinsurance, any taking than GA's quarter quarter over annuity year Insurance. this billion last across highest ago. from totaling looking just over $XX to saw flow quarters a inflows, compared time volume billion. activity billion business-building inflows in through have you of Atlantic X point at in history. to $X been a total Global QX, period developments And the $X I bit in block we lot That's aggregate, a the are of initiatives. the sales record

of front, came the function range ROE continue target. The result ability a of in quarter about On to this for we opportunity GA. Overall, us favor of at and our long-term elevated to the at opportunity ROEs. to of in as we the generate transactions include: choosing well make investments GA and to good of us expense below for XX% longer-term as liquidity create The to that really XX% value QX long-term ROEs mostly pretax of volumes, significant some feel as we the as earnings right big leaning from the trajectory great long-term levels the into couple feel continue together. near-term are at drivers ROEs the block a a the but quarterly about significant to factors for ramp-up reinsurance our the

as bring thought business you we'd as X-plus are well that are months XXX%, In into through closer real now particular, examples tangible we owning we our across performance. given markets investments of driving capital how collaboration some

First, estate. portfolio. unit unlevered billion $X real of We a a on in X,XXX-plus recently closed multifamily acquisition

we of the core capital real estate seeing are risk well-capitalized of me, -- buyers Given very excuse of estate for globally, market, return are one. in real the we the few excellent which dearth

benefit profitability. deal to of We longer-term put unlevered have with which that the for the of risk-adjusted going significant is our deal near-term on type potential, compelling priced really upside X% but is return ROEs we some conservatively think it's return, a to an pressure this

we originating to make increasing But the As expected appreciation pursue for we're time of over the liabilities a yields an in portfolio expect X% be and less long really interesting range, excited year obviously this X this on term. our the low asset the combination of and than today. are the we one the example, yield to where deal

great this coordination example make. Now of will equity want of really increased there naturally think team be limit how type to GA. much we our of that real a it's and But estate our between I a investment to

eastern to equity KKR's had line collaboration the This is have interest who business. We Labrador Island quarter between also infrastructure that our side the development of teams significant together which Atlantic on this positive and in protection. an transmission the a is structure investment to renewable Global worked announced with brings infrastructure energy Link, downside very We first a Canada.

And finally, and we increase, exciting through continuing Atlantic. been combines generated franchise. $X Capital by a for by cloud Markets support fees. ours, still Markets Strategically, Global growth, evolution able from capital a our take which was compelling portfolio simultaneously study center Atlantic, facility, growing early were Global tranche to the we markets institutional QX portfolio with company, rapidly case company teams team to our we helped billion facilities great that a this Capital deployment. a wanted well our our represents that outcome AI billion of playbook our brief made and $X CyrusOne, in investment led credit driven as as hyperscale to credit arrange really you demand where a data has To an of anchored drive for this

would and possible examples our firm been the without model. the interconnectivity these of All have across not

to this expect many come. examples more We like

significant the Now is on our before some we quarter continues most to fundraising firm, In briefly of to touch metrics active This off Scott, where to billion be second the $XX it of momentum. our history. across capital. I very the operating handing raised there in quarter, wanted

Infrastructure great record a something And raise, fundraise approximately now fundraising we And quality our it has obviously our next of Americas our It's has $XX so middle Private Through the we're market note, final benefiting outcome private our as well speaks pleased team equity think strategy have yet the is underway. receptivity to look to V for its $X is with billion, our we our cycle July, fundraising of to track and super its in within we already close. raised. June, adjacent that capital fund, called equity, investors and particular existing really from achieved I for Global flagship billion goal our of first-time initial the and Ascendant our launched flagship. a fund. Of reception private fund held team. of not of Equity very our Also been

wealth. private on specifically moment a for Focusing

the capital, in the vehicles quarter suite was days to driven equity still real private by be of raised K-Series of The $X.X of Our our we of really gained momentum, strategic we what focus. a long-term billion but strategy. in which K-Series view XX% has earliest are

now as well As private and we key from a investing a verticals. as have up of $XX credit, across equity, estate, billion reminder, year that's billion ago. our AUM, That's real just approximately over vehicles infrastructure, $X X representing

plan record distribution hybrid in combining track broader KKR available By with franchise nearly investment And partnership Group, asset well With strategic client the and looking that introduce as serving trillion of alternatives beyond investing a K-Series, global managers. active largest a Group of universe to as individual KKR's series market Capital has of solutions leading public-private of we million world-class public make $X.X platform distribution recently XX investors, investors. one the Capital expertise wealth announced AUM a exclusive to capabilities. XX-year our with built we Group's Capital investing, with

mass Importantly, the our the beyond doing include we K-Series approach a about this hybrid to accredited products much market. and the collaboration, investor excited as are XXXX. as we future the reach they of the launch will share in the are We're and more expected already universe we what step with expand product's

invested. in QX. We deployed Turning $XX capital of to billion capital

first the For which of $XX now estate, quarter billion, and have XXXX, we Real is strong half across of a almost deployment in XXXX. the particular, had half credit. double first equity deployed

the in On continued direct and put lending credit ABS. capital side, opportunities to to liquid well as work high-grade strategy as

remains well. there second in pipeline as healthy very for half XXXX Importantly, deployment a of the

of business that we the translate excited the how and Overall, outcomes we are half across momentum turn that, over very the me the into seeing And that P&L it with firm can let further over really around to Scott. year. second remain

and meeting. our thank fund Thank joining are I you, our our KKR's and thought share half some half. today. reflections together month, everybody, Rob, for of Joe of shared those me the meeting and investors, today, for by I and you, we expectations while some sessions annual partners followed held Last the call from would for year messages we on we the second first in the our

in message this year. The activity back. activity investors and And leveraged deal we we second run couple markets that our given continues, of give year. main backdrop on, If sense, The significantly the is to you momentum the deals and XXX%, globally, the macro the beginning XX%. believe are and and even announced for is improved, these up see nearly over exits shared To more are rate is typically announced greater are are year-to-date, understate with rates a a open, of the of XX%, activity market back has market will credit since market M&A and up approximately quarters is up you takes numbers we today. turn seeing issuance half it IPOs the feeling the we inflation

of Unless We to activity expect happens businesses. in up, our are is believe is we and attractive the yield dynamic first. environment. the What's this monetizations this encouraging increased pipelines revenues high. is to visibility year relative to something very second up are also investment half this markets this momentum, Deployment disrupt up, seeing are that a are see capital across up, we is

uncertainty are us. Volatility with and still

market, didn't to as activity last last are years So we are values them market. deals is sweet to supply closed get far, the were have volumes muted This a more contrast or finance transaction sell of open we This done it of of assets couple not were mature could market. attractive pent-up to feels when be in that want in in owners like and but a year have year spot didn't where high. year, XXXX attractive values only coming an levels

So we are optimistic.

shared private many and things we in A in our industry In in couple June not. did sessions. over-deployed we XXXX, of other our equity, while around

before We years. the during learned linear and deploying crisis a the have in been last applying in the financial many we have been lessons fashion and

As In $XXX-plus seeing trillion returns, the with healthy scaled we're a we of a and dry strong across portfolio. a platform $XX global powder credit, benefits significant billion result, space. now have opportunity a credit

to investing asset-based junior see over now credit, opportunities billion, other and Credit opportunistic Private Asia amongst Our $XXX we is business and continue debt, in attractive finance, investing, areas.

opportunity we immense, capital opportunity core, very equity massively investment the sidelines, is banks our across in opportunity infrastructure, the very global the and and with attractive. estate, value-add, real remains In the feel positioned. efforts climate. need The outstrips is credit compelling and In supply on well

coming current play have from believe and business the this office dislocation. As to years a over estate share our consequence, real XXXX. benefit we ability and the retail started and in of exposure next will will reminder, don't take have so we We we the And several offense any environment. in we

highly real compelling. estate The investment opportunity is

real have And their flow some closed seek also introduced equity asset to April exclusive over Atlantic balance we X in real deals. pipeline see a supply-demand alongside as of across discount. Sidecar contract invests in scale a since capital in has assets. firm. at amongst block Franchise the and compelling full fifth have is of deals we area This investors is sheet a under best And the most $XX trading estate Insurance. June, on the that the Global billion Ivy and our estate imbalances this class This and liquidity or sell We environment, owners

We've you XXX% November opportunities last mining we been X the And speaking announced when since the on deal. focused with roughly months of we shared GA, we owners. untapped we're became now

heard, As we the the ownership, seeing business GA in rapidly. fast to of the growing as impact growth simultaneous combined And you XXX% transition is business investing term. long we're the for and

KKR minds ways investing asset and As very Overall, was across more to global particular we structured about at the it going in than Japan in of the create today XXX%, more with to KKR feel our is in assets, the today, beginning work here we year. GA capital with sit markets optimistic scaling greater more GA broadly. opportunities classes, opportunity finding at and value together the

questions. keep team, that, market to We've your we're our investment take very performance active, to our strong. plan is we simple, positioned better well Day. and open, it to our we So is is particularly the you With Investor never firm about the with shared the felt are happy April at execute

Instructions] from [Operator comes with first America. Craig question Bank Siegenthaler Your of

versus question comments My investment your ROEs. income net near-term is and long-term GA's on on

levels yet because liquidity So excess do of line? yield, depressed the have liquidity deploy deployed, you excess what yields it's over you given you to how GA's currently as time have expect improve portfolio investment be fully that to and that

And on Why shorter of Craig, answer depend let's question. part the is couple don't about business. what going it's from talk and bit I what the Thanks there's the the ultimately here. start in maybe a for Rob. we're out? is going a growth seeing things on to But of your little maybe

as as team, markets there's new to as our relates operating we're inside on. digesting levels And up been and at a X referenced taken you a going we've that, equity $XX billion so and that as team, to X And additional real compares infrastructure result, of some past team, it work you linking lot our muscles our growth. We're of of capital around You on really be deployment good just our of lot also firm that estate liquidity. using growth. a elevated we're the months. to trying look put numbers at months, in of to preceding billion can And $XX around the capital, if imagine, very we've thoughtful,

look quarter, at some just billion of numbers And to you of had roughly cash. we end if the the so behind $X put that,

that If be doesn't the ROE year worth to at medium-term we net corporates we at ROE you point meaningful rotated other trying was around is at making number to assets. And actively think as is will that of really that's ago, that prepared investment can that into expense but talking that get coming have day running higher-yielding to look yields mentioned, weighted look example about us originating estate roughly remarks be look point we're think expect shorter-term what lot I to where about that's a the X, of ROE. billion, I believe today, I even long-term core this could like that in It's and think investments of about take an closer we that income the liabilities high-grade I today a X%. was real we being the like, X%. Think where account generate into the are $X north that

not been going accretive to know for they'll think some are so have us near-term on they're P&L, pain But take investments dilutive. those while, who shareholders us for long-term not we're I And that to power. to short-term our decision time, the long a for make followed a with P&L only earnings those actually always

to is at our in that we what we'll then QX the as exactly tough look we and and about will P&L. that a think from long-term -- operating going we operating range, to for QX. how feel returns it's we're growth a expectation below KKR to we forward, so near-term as pretty based of where bit in long-term benefit that's GA's on that long-term is the as that's are probably that And and across is my expect. But us, expectation extrapolate our probably platform but of we that growth believe And have and in that there mean we we're a service XX% again, ramp ROEs of lot level earnings the in ROE a little up are to function front we XX% we at strongly see around into XXXX, all look growth QX, we

Cowen. with Katz Bill question, Next TD

Okay.

little time. So many questions so but

of terms that. way reiterated billion, to $XXX the you're of you sort on certainly volume, in well Just your

the about you're got you Asia, well. first you then wondering on if Global that V now that could demand -- then hearing just America launched Fund. might comment and You Infra V, mentioned maybe into was in North on that the as classes the the of sort sort and into I the LPs when the you you're great, market market of tie come for closing what from start asset to across is

on even There's Bill, Thanks about the for the question. context in go $XXX for couple But funds. just things. we raised it the going you back what's of back beginning $XXX and to the call lot of Only billion been firm, so it's $XX on a Scott. there you. be last was to the think go XXXX, focus tends One, broader I X.X billion a flagships. if of know with flagship years, of billion.

So we that. improve. chat market mind the we've back coming the of outside in as we been of And majority to point, been well. The fundraising activity also happy continues about the now to the that generating have the vast keep should flagships overall but flagships, tone in has to your

I where think what kind about. depends you you're it of and are on talking

just talk to let's and up Credit, see continue to on asset that catch the trying have classes. we investors made. about they allocations So to Private interested very Infrastructure

those real private of There estate area. been where to doubt. now. Then also shifting similar there of caution, to classes. I be move in continues into of more equity, It's you has bit include right activity think that theme a credit sentiment real a bit So corporate asset kind in estate is I credit. on would quite kind a the no

estate estate really is you reality have private although investors this that last it we're has lag have with a Our the I'd equity. And as a bit, deploying activity time perceived understand, the of bit starting little fundraising a sentiment be And the as equity, may to prepared year. but equity. picking valuations is in conversations then invest been real that the in more up. first contrarian, perspective in to good is to going remarks, this into bottomed is half the quite real say we've in year, heard that active bottomed. And

up. As back. People and is you get starting deployment up are to are heard, more monetizations money

programs So of that. those see some are more to starting with mature

latter I as get think half you'll the the we year. of see more into of that

as have update point We it I'll private wealth, companies, to and little not activity yet. you'll launched minute. sentiment data bit up. Ascendant on start a see thought and Equity recent opportunity Actually, private a went to as we not feels to fundraising well, bottomed But big to positive. much there's so in I we've seen you the our know, as our More U.S. a insurance shift in let might lot broadly, give us chance a Craig from environment strategy, a equity while. as of is just for that report funds, as upside. Insurance flagship Private momentum alts us, as a all an back have has like we're rates decent pull as which seen seeing that.

underneath gives do It's sense surface. data And activity, it why latest a you there's answer, for one things that a the the least but long bit the And point there's we variety on indicative. hopefully, so equity, but it's you we at have? of sorry a happening Craig, don't just think not give of quite big a different private

Sure. for thanks question. Bill, the

private our from Ascendant. what heard great remarks, feel you strategy, on That's first-time us. Rob equity vehicle as we for in we've is prepared middle market our So some made progress

XX, June of at $X.X we're billion. As

spot advantageous at We have a moment. hard oversubscribed in the cap. that We're cap there, at $X.X pretty billion a we're hard and

begin diligence we clear, through away there. And back to want for those be clients to some final diligence, clients turning that final are so we're cutting allocations. of on And

thought that be a North lead also 'XX. to But as feels dynamics data relates helpful again the too constructive there, is So through early those backdrop try America one to would I it again, far that point. to

And me, for lot Bill, thing X in the maybe interest other I know fundraising just there's environment. X of quick a because

of to One relationships. themes. see is of concentration We a continuing are couple other

of much going been do X deployment want and last increased accelerate. value. there's about higher last pacing add portfolio did power partners talking more who and tools the think think, with well the years, that fewer good see for we've a finding we that what construction, to continuing And recognition we're So Also, and we'll results, of more and investors you're I we're to the out so see to positioned decade-plus, context. I figure in to job feel really dispersion trend

Next Blostein question, Alex Sachs. with Goldman

wanted for to start question the So deployment. around with a I outlook

a number pretty times of announced as and deals look pipelines robust handful you've well. it a mentioned that the of You

So mean back kind guess, I when we deploy side, bank equity of And you're coming flip think are utilization lending kind the loan own quarters? several private particular, markets indicated in about you the thinking seems how this over as versus you markets about capital, of direct business your what syndicated on market lending that force? of environment does be where for this direct as navigating full to in

to the a we're of second investments. half see of see. private you So activity traditional relates of release, this to continue going some seen which great very our it backlog Feels first, we equity -- are private year, the would have like Alex, Why of page there, in healthy just to and in acceleration an equity, start? is in I don't to it's the as press Craig. have

shut the those And reduced of honestly Scott effectively it markets, markets or risk your lending all back financing a I think optionality. reward. volumes particular, When we But just on as level ago the with be led syndicated markets think to very debt versus when modest. just private and were think on markets, syndicated point a M&A debt back on mentioned, provides I direct we the to closed, had syndicated in or the constructive year it think when we pretty many were we activity. saw of

very actually it standpoint, that investment. -- of to private outlook the the gives equity PE it's be debt debt flexibility So is to have and us very to particular framework think again, we'll I from private market. But of what right a deployment, syndicated solution terms think terms think honestly, in helpful able a in the deployment in healthy through the of we

market share smaller hat a the versus syndicated you'll markets So but overall lot volatile, I be you debt a are on, higher. see a debt see those volumes with think environments where private really may

Yes, Scott. Alex, it's

a said. this well one focus last on the think becomes ahead. where that's on more quite of think muted. the was depends pie. a This about I is deal. I is be The circumstance can environments private of a that share clear large way smaller year, We still both. There of the It it deal market pie credit bit these more share use how volumes and were so the

And so that's how we think about it.

Next Autonomous question, Patrick with Research. Davitt

the next you update distribution new an with plans to more on certain and online can broadly, the large update And specifics few quarters? thoughts us over on products what to products suite? add give or on rollout on any then coming K-Series any to the give you Could platforms extent

Patrick, June it's step billion And everyone, of to don't Global set as back include to individuals. number just of does I $XX for XX, management had from assets that level not Why at under begin? Craig. we And around Atlantic. policyholders

presence think if have. that understate So that breadth anything, the we as about you activities of would our

over time, directly new individuals capital funds raise capital net see of that And that from most and offices family tended teens Now percentage ultra-high worth in is we our worth come high and from individuals. of net and to are strategies. invested our

it's been fundraising. healthy a environment for So

as K-Series are market. and wealth again, our recently, the specifically These know and funds most tailored of introduced for well, Now are you designed strategies wonderfully that I know that products. we've suite

in and real vehicles And Similarly, have KIF non-U.S. U.S. vehicles. then and equity, private on estate U.S. K-INFRA focused credit also. focused non-U.S. on So the we have private additional we also vehicles we and BDCs and have infrastructure.

that's as about that billion of billion ago, private that around good so asset true particularly a days $XX think was I are mover. the as our feel And as like have of $X an products. equity, here, we suite opportunity a we're And really from in progress. feels And so in first but $XX year it we infrastructure early K-Series are these in which well and classes billion,

QX, month. were month. a or end 'XX, million $X.X a $XXX Now thereabouts. raising in we QX, raised ramp of so billion terms $XXX million we $X.X the we at and $XXX were about that so million we billion month pace In we a at raised of mentioned

feels coming have of of we're So like But over platforms update to expect clear, We number terms and quarters. the months in do present be to we and and the reception platforms. where momentum it seems really specific increase don't a good. of interest number

that's think is going private terms to in youngest particularly true us. be the the of I of those BDC, for products which

progress. And we an secular interesting investors way Mass is it I point take more wouldn't again, prize. the not individual access feels had long-term great away eye here do really easy opportunity. like from So have alts. to Like think that the affluent the

the Over we've a the dollars track expect and marketing, distribution it into just record coming for partnership And prepared winner. our in well investments Group, we touched given of do remarks, positioned just to be in continue increases assets feels our like opportunity opportunity strategic an we these trillions as set. to we're this really with Capital our on brand, our made And of years, and flow to products.

that's hopefully, helpful. So

Patrick, it's Scott.

or a it rollout team. ahead Just The takes and at platform our train while on platform a a of sales is and have couple really once kind expectations. quick of in you the get additions. to and work kick And it advisers of the slightly

partnership. the progress, walked pleased to yet your the really raising the new But we So capital numbers remarks, I'd K-Series on today. products, that with announce new power Group we of anything kind mention embedded don't the the on prepared did our have isn't in front in through. To but Craig say Capital question

there, hybrid partnership vision. reminder together. of not the products next launch with the to of in is a announced clear, half product going in year X first we're credit extent creating We Group. But be to the As that that we're Capital

hybrid to well of other as out parts roll our space expect alternative the the across with products We partner.

So to on come next more few the that quarters. over

Next question, Dan Fannon Jefferies. with

So just Group the on that partnership. build upon wanted to Capital

of of If talk the context the you a came of products year and the each then how terms choosing you could next couple longer-term you to and then partner. in And just about vision. other maybe background mentioned of kind the

have Capital think So and so differentiate the the a you're going between a Group looks you're retail of lineup what K-Series mature there looking you like. I and out not previously the think said whole you've partnerships to as products suite market. to more curious that product for how But

a take crack. I'll Dan. Thanks,

act. wanted So they original Capital partner, Mike partner, about they Gitlin in the that should did they different participate to, a pieces about to did release, thought the decided best together? called it. they And I alternative really nice our they buy the been they Group of back job laying out how go press thinking how partnering it was they businesses, something, had come Should how us, think, should if and space. acquire and you

an spent reason well So bit firms clear, together, extraordinary a work for the same us on for. fit. to us. understanding other most as is the people. And really who to We about cultural called on be reason together came this counting got things thought just all focus each clients delivering world same We quite together, time know way, of the the value and think we really and come I they as the

a was how values together, and So came world. and see vision how shared that's of the joint it it we kind

of this we're terms and going of kind how different. In is where

the way one but close accredited K-Series, does of access. think are our U.S. roughly precise about households. we're I'm simple on never look single U.S. it's targeting let's to mid-single it take not That's digits, you at. XX% the it, or enough. the take, and percent qualified X%, market investor With be just means that of households numbers there's but That give depending U.S. So digits and close purchaser. what to the

simplest what Capital in to In XX% what its we're other participate And we're the will so a we what households Group doing of do. creating product form, with that doing. is allow that's

element be that be strategies will by strategies managed be it's by will So portion and the an us. so Group, managed a is the then there's market going be hybrid, Capital liquid to to private that going that is that

about, geared for the all the real of finance with it equity, as as we're will starting I products component toward credit of products both phase. both include of market. And launching, in then so sleeve. infrastructure, lending credit credit, broader a credit. think liquid of mass think asset-based having that these direct the talking private for design private of And we're said, audience, private plus estate, that and we're So as component that in And that other us, and a

on of I'm expect, going So today, a over will time products time, likely areas. from across not to it those all see frame would but I put together us over time, you

And expect helps. that keep we'll the but so hopefully, out that's years. we coming But you it to over play posted, how

Bedell Next Bank. with question, Brian Deutsche

the the do about? I sort if then FRE incremental is see ask. margin, I move overall as in Capital can if here that given pent-up Is well, squeeze the the do above for in being margin about on The improving obviously, X-parter XX% accretive? lumpiness the in Markets quarter to Markets of as year, see I wrap Markets, margin questions of can you And Cap lots you And Telecom third can a And we on Yes, of -- that? for your that FRE your elevated. being Maybe a Italia you talked think demand Capital just you an the end talking were any question. that comment, peak? you fees maybe environment therefore the into there

Great. Thanks, Brian.

Markets, Italia X. relates you're it to as So July right, closed the Telecom transaction Capital

at a X generate I aspects quarter Capital broad-based for Capital out, good that transaction. probably pipelines tell Markets of fee quarters. meaningful would Markets but part are think But involved, you, X as multiple pipeline, different will business I that We certainly being of our as I look

that look generated aggregate ever I'd we million is Capital And when half tell as As the roughly that you $XXX at of business. XXXX of pipeline it. seen year, in good I Markets as revenue that includes our our back we've

look year There broad-based, also it's the Europe, come of stuff are U.S., A lot indicators. around it these needs debt, Again, the what to quite encouraged it's third we're pipelines. fruition. It's forward across across So like. are it's But back half could is to party. equity. of Asia,

So year the like. half we're feeling could back really good look the of what about

FRE to Capital that it in higher relative our absolutely see just incremental an to quarter, higher given fixed are FRE going elevated expenses As is relates are say to Capital Markets margin, flow-through nature margin. more revenue. you Markets in The would operating I

I've can and if we definitely most described how the margin successful Here's that operate believe that and on scale team, in successful. the And if to a with includes firm. in going cap to that's for is our model across that across as we've more operating that we're sustainably the FRE mid-XXs got a we're complexity FRE basis headcount the the above our our at expect environments. But management future lot of our meaningfully we're firm, an the scale today, And margin business a expansion fees the revenue, growth would pace market not I conviction going our in in past. in we us. here we're margin

might into you some So hopefully, back the half year how of Capital and on margin. in Markets FRE gives that feeling that color the translate and we're what

Mckenna Citizens question, Brian with JMP. Next

a update $XXX then performance So the accruing of get to a be on deploy of year, past to of couple the then much old much years by and great on than specifically above that's to How AUM you Would how is performance heels AUM of I'm the have over to way there strong and than older just years. few cost think vintage? And continue magnitude as accrued the step-up ultimately over is billion get an this about that? you carry-eligible trying and the the of has capital. less next breakdown a how of in carry. much grown this versus is fees realizations sense

Brian. Thanks, Yes.

deployment And a we time break we could vintage. take -- a lot shot don't out of the at around spent Let linear that. But firm. that as tell a you we me our

dispersion healthy of you over the feel that past good to find a vintages. or I across so as X years, back And level going you're X look different

roughly I the metric as the indicator our that's one. that the sheet billion. carried best on our I interest think to And simplest balance forward look at $X.X that, is accrued today that gross me, is honestly

you If just look back that quarters ago, $X number was billion. X

the for step-ups paints we in could also as might healthy look firm So how forward well. than carried investment good it both relates to expecting as of feel are pretty more but we here environment good pretty we've what think across actually and about income realize, monetization-related been levels I bit from where a a an those realizing little picture to the were carry revenue, ramp interest like

remaining to this And on your whole is cost to X and not and roughly the value that, our XX% XX% Xx above cost cost private over that capital well excuse a look just greater. as marked or question capital a there, XX% marked at is at me, is roughly of the -- dollars going to that additional and is at tie statistic and of we that at and give look is carry. X.Xx you fair But when greater portfolio just of at sense, specifically equity accruing

team at So I we've that about approach Nate, deployment. things was linear think of one had Day, and Investor our this talked the on Pete

invested we've discipline think years us learned the last portfolio. an us you've opportunity has served And I of to a the more the really the back honestly, really mature pay several dividends years that well think over ahead. in GFC that to and have seen in terms dating some of lessons and having I how we that capital

Next question, Ben Barclays. Budish with

realizations. of what Given terms QX? And same QX, of talk of was into better expected out the shaking $XXX revenues the wondering you thereabouts, expected million outlook a up an us the color around update you lines, Markets Capital give visible ended you about could if in realization the going could I in for lot along on than pipeline

Ben. both. I'll Sure. Thanks, handle

monetizations me level. around start Let at just a visibility healthy with QX, pretty it's for

QX deals from million expect quarter. or We that that we has signed are happened either are either to this for plus that of or minus close up monetization-related revenue is $XXX that --

investment Just XX% income. XX% carry roughly and breakdown-wise, that's

that update, XX. quite had I we XX think the monetization that days, So some to is necessarily anything of X added the out X thing the other. in can There's side size, is a quarter a course, press stated of of ended that in where in at I point We went around you're delta out view our it we your -- $XXX bit relates estimate up were it's the is June in that landed, XX that things to release pipeline create time. we as to been and million $XXX press which at press wouldn't on of over believe the time. And that that than that we significant few greater on up release then best end-of-quarter our and that things today significant But question and that million June I next few referring between And quarter a time. release happen through gave than versus better the put size. that say things

Research. Next question, Wolfe with Steven Chubak

Cap sponsor question is It I feels the with wanted another like squeeze given pipeline it in longer-term in early Markets. just recovery want look pressed stages. But lens. it's something on the guys past. still the in I to just at to a I strength, you on

the monetize at XXX% least GA ownership to better. expect You

think years. You're that you fee certainly would size peak, in see look potential lens going revenues Relative what what might Capital you there to generation a a the maybe by frame way few prior for over be how the or like? to next the to the what normalized 'XX Markets trajectory under growth business? cycle franchise could significant Is

Steven. you a Thanks, I'm give not going number. to

in it. me of We haven't try In let revenue. given frame we and a XXXX, past number the but $XXX million did

continue opportunity one Japan, at But is effort. We're our XXXX. debt business the firm. and see we We meaningful, position equity and continue both in the both think across its with do capital is markets Capital said, those to we're we're with Pac you a a how on to doing also share. that's across that for a we're couple really and believe side the our best-in-class right. in resonate able and that about model just hundred-plus combination, our more in we lot a Global to but to also Asia revenue very business that's building structured Markets and Atlantic. in distribute side million that in Markets execute dollar of business as of I differentiated that the sponsors third-party going We have Asia a approaching professionals buoyant pretty so opportunity where being and take we the more And look geographic expand much Now and think We've markets own corporates our to retain from to in we're the mature platform, KKR market the were perspective transactions. when daily. And capital Capital recruit as you very talked

from I that to that we meaningfully picture number, give you think the we're so can a think today. base painting going of we're we're of grow that business not And while at a sort

a a really dollars up. more Europe we're potential Rob's to And year as invite budget Asia, thing bigger would right. we portfolio think of a across our is hundreds the which get to working of we maturing, question, GA, that in I Steven. that other Maybe doing out of some should across point our third meetings. and all and It's you good topics. asset point, parties the other we as as classes is these of millions But is asset big classes, contributor least I it's think more at

to lot it's you agree you're I be going give it a been, not we're should more but that a positing than if with So you. number,

Michael with Morgan question, Stanley. Next Cyprys

funnel. the partnership announcement Saw recent on interesting sustainable question deal on infrastructure infrastructure. a with Just seems It sourcing projects. HASI an like

for broadly on opportunities exciting helping for to how you're you over time. Just how bit where some work more elaborate thinking on opportunities space other you're right curious view other the of potential then partnership, hoping the infrastructure seeing putting just infrastructure, you strategically little this about this capital And could in partnerships KKR. and a just now most

question, broad themes your Thanks Why Mike, don't I Steven's in Craig. it's the much Again, lot start? of echo a infrastructure. on question. for question like the would

just So the to we're around Four and today, really about ago, $XX years progress AUM situated platform billion. I think how encouraged we our with date. as think we're was

billion. As we at of were June XX, $XX

trailing $X to So the deployment And stopped Capital XXXX, billion. it footprint seen deployment there while last in at have hasn't a organic all the $X billion then for months, was topic, AUM And $XX grow CAGR invested increased here. our $XX innovation you've back the seen the XX over to Markets, And billion. billion, also in meaningfully increases, as again, fee meaningfully, of was increases we've our well. In as XXXX XX%. billion. stats opportunity $X.X And growth you've pretty

we're it transition. we relates very Climate, the really given think can expense wealth. an in the is again, investing as finally, we and as then mind So where to private differentiated, noted, energy And about our adjacency us infrastructure be for of front opportunities. earliest we infrastructure think you behind flagship as days of today, again, is

relates really of do we you Markets not that's number a And we don't it's are data it also as some some ones years. we're think hang be relates invest. And that in investment If plays transmission, where do particular, uniquely space, about the the why this capabilities, heard renewables, given investing, Capital we believe there we're opportunities, moment, power investment particular, broadly, and our as generation, to digital and positioned from for major of where been as as just several our I example. the think in to the one for it data across constructive those of us. can activity, pools are well, I the the then a think core out very and center for a of exciting combination piece to of in most themes areas like in in center, also on it's technology, CyrusOne player infrastructure, I

just from around in one connectivity. X X X Pacific. So differentiator X footprint platforms, again, a the numbers independent Asia in U.S., we and real is The global put the things, that's have to data benefit the infrastructure in we Europe, here

risk can be pools got the So on of depending reward, relevant. capital we've that multiple

an current real infrastructure, we today core in secured if anything, looked investments scale of have on capital that together $X billion value. enterprise this with sense, $XXX total and investments in north enterprise be pipeline. just would of if the the our And of this visible included active pipeline, strategies. Asia So understate To area highly at footprint wealth size as and billion infrastructure, equity here. XXX%-owned give private and estate value alone, well you'd a as with invested a our of basis you you

have really So that the exciting. that's we this area in is one an like opportunities

we in the estate, credit. have and On active renewable real both power In developers. real side, XX-plus we're equity estate

well study. this That's here Capital alone vehicles opportunistic also and end be And financing over of end opportunities. billion of Markets relevant the stabilized And the prepared ABS data other. can the insurance the Our remarks, $XX both as credit heard as at CMBS. development have evaluated spectrum in year case center active, X the team been and on you our on again, has CyrusOne we

think So bring. great the I it's a example that thematic we can approach of

it's also great the across think see able I you to example and how teams we're connectivity the geographies. our across a firm in culture and across work of can and

thanks for question. Michael, the

I'd big I is digitalization. that themes think part to the to X question your of point

areas. then transition, to if that's all data climate. see a towers, you'll centers, fiber, active it's announcements, you incredibly Craig's theme. And of be And recent point, I those to continue look think deal energy across renewables big at

partnerships bit that you And partnership our partnerships a platform of past finance HASI similar XX what out estate. originating. and around talked the better in the that have of real to across referenced, people the part XX,XXX think would we've asset-based there, I I think about is we

more So you'll It's that. like see develop vein. us continue similar relationships in a to

& Co. Next Oppenheimer question, Chris Kotowski with

funds be should but expected that quarters. about fee role, kind flagship Scott what kind expecting a dynamics curious couple the of said here management next we lesser of the I base about in heard I'm of playing the

over Infra $X So billion in you up $X said in and billion [ left it's ], still XX% V you Infra IV. there's raised but

you So event? And $X does still is the quarter that similarly equity left or I year your kind later a turn have, do flagship fund. with think, the on that of in in -- fund, next prior private third billion

be mid like maybe that Is what turn does of that expecting? we kind on So XXXX? early, should later,

Rob. it's Chris,

Infra this turning the and quarter. So some we're QX Infra V quarter in with in you'll early infrastructure, fees see given some on quarter, through end flow case for start the in the to of management actually of starting V deployment the through activity so

-- relates yet capital I America terms as to [indiscernible] but you left of North deploy, X/XX, not to to in today closed announced -- we of but we transactions. that referenced had think think had it X I XIII of prior still X/XX, as As

and quarter. out to we've we would expect go for nearing but that's And launching investment end, been why so be next still And time the our period. fundraising we of to have

of that you size And kind funds the those shared have confidential? or target is of

We have not, Chris.

Arnaud question, Next Giblat with BNP.

to the distribution agreement on the the question with quick you're a production K-Series there market through or perhaps new appreciate doing after capital individuals. assets was A secondaries. opportunity if to and through set just an I the lot there distribution to to opportunity was individual address markets. distributing I complement and go that wondering private of

Good question, Arnaud.

an the We of do, think that be We've that in might opportunity the down candidly, but at part center asset and there it. about in. center yes, how of point, it's road, this not space. for to never, strategy next time in say stage. analyzed the it's thinking at we're and spent classes not So plenty step front this us market. terms but the Never secondaries we're front there's across We've

floor Craig closing Larson would the I to over like remarks. turn for to

Thank I on would additional update quarter any in days. follow-ups, you out just like look you forward next KKR. thank giving if to your directly. for in please everybody have reach interest continued an We XX to again. And

teleconference. concludes today's This

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